Pratt & Whitney Canada lands massive TPC loan to help launch three R&D projects for small turbine engines

Technology Partnerships Canada (TPC) is providing Pratt & Whitney Canada (P&WC) with $207 million — the single largest amount of funding assistance since its launch in 1996. The three projects are worth more than $1 billion and underpin P&WC’s small gas turbine engine program, helping to solidifying its status as Canada’s premier performer of aerospace-related R&D

P&WC — a subsidiary of United Technologies Corp, Hartford CT — has a global mandate for small gas turbine engines and supports a staff of more than 6,500 in Canada. The R&D will be conducted as the firm’s primary R&D facilities in Longueuil (60%) and Mississauga (40%), with related work undertaken at facilities in Lethbridge and Halifax.

“We are number one in the small engine business globally and the TPC investment allows us to be competitive and increase our market share by keeping us on a level playing field across the globe,” says Dr Hany Moustapha, P&WC’s senior fellow and director for technology and collaboration programs. “These projects are a continuation of previous R&D projects that we’re building on with new technology.”

Moustapha says P&WC’s multifaceted relationships with Canadian universities and the National Research Council allow it to compete against firms which derive greater support from their respective host countries than Canada is able to provide through mechanisms such as TPC. The company spends $10-12 million annually conducting collaborative R&D with 16 universities across Canada, serving as a model of cross-sectoral collaboration for other industrial players.

“None of our competitors collaborate with universities like we do,” he says, adding that P&WC’s competitive edge is further enhanced by a disciplined corporate structure and strategic allocation of fiscal resources.

MAJOR R&D SPENDER

There’s no doubt P&WC places high priority on its R&D, as evidenced by its consistent ranking within the top five corporate R&D spenders for the past several years. (FMI: www.researchinfosource.com). Since 1996, P&WC has received nearly $700 million in assistance from TPC. But in the same eight-year period, the company has spent $3.1 billion on R&D, for an annual average of $390 million.

Indeed, P&WC’s high rate of R&D expenditures is cited as a key reason for TPC support. A TPC spokesperson was not available for this article, but in 2003 — the last time TPC invested in P&WC — a spokesperson stated that the firm’s share of TPC funding corresponds with its share of R&D spending within the aerospace sector (R$, August 8/03).

TPC’s decision to fund P&WC’s pre-competitive R&D projects ends a period of relative inactivity and comes at a critical time for the industry assistance program. Industry Canada is currently examining the program as part of its portfolio review — a task made more complex by the Liberal administration’s minority government status. The program is also expected to provide major assistance to Bombardier Aerospace to kick-start development of its CSeries, 100-seat regional jet program (R$, December 7/04).

Both the Bloc Québecois and the Aerospace Industries Association of Canada (AIAC) have targeted TPC for additional aerospace-specific funding, arguing that R&D assistance is a potent incentive for firms to become more R&D intensive. The Bloc argues that increased and stable funding for TPC is essential to safeguard and grow Quebec’s thriving aerospace sector. The Bloc and AIAC are also calling for a national aerospace strategy, which is now being developed by Industry Canada. That strategy should be released in the near future. (R$, December 7/04). The aerospace sector has also been participating in plans to develop a suite of collaborative R&D programs aimed at diagnostics, prognostics and health management for propulsion and mechanical systems (R$, July 16/04).

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