Jet engine defect will cost North Berwick plant's parent company billions of dollars
Courtesy photo
An aerial view of the Pratt & Whitney manufacturing facility in North Berwick. The plant makes parts for commercial and military jet engines, and services the company's GTF engine for airliners.
RTX Corp. (NYSE: RTX) announced Monday it will lose up to $3.5 billion in profits related to previously disclosed issues with airliner engines made by Connecticut-based Pratt & Whitney, which operates a plant in North Berwick.
Aerospace and defense company RTX is headquartered in Virginia and was formerly known as Raytheon Technologies, which formed in 2020 following the merger of United Technologies Corp. and Raytheon Cos.
RTX subsidiaries include Collins Aerospace, Pratt & Whitney and Raytheon.
The profit hit was disclosed during an impromptu conference call Monday morning, which provided investors an update on how a defect impacting hundreds of Pratt & Whitney GTF engines will in turn affect profitability.
RTX first disclosed the issue during its second-quarter earnings call in July. RTX said at the time that up to 1,200 GTF engines would have to be removed from their respective fleets over the next nine to 12 months for early inspections after finding a rare condition in powdered metal used to manufacture certain engine parts.
The company’s new fleet management plan for PW1100 GTF engines, which power the A320neo, includes removing between 600 and 700 engines for shop visits between this year and 2026. A majority of the engine removals will occur in 2023 and early 2024, the company said.
The removals and added maintenance schedule will impact the company’s profits over the next several years, the company said. It will take a $3 billion pretax operating-profit charge in the third quarter.
Shares of RTX stock dropped close to 8% Monday to $76.90, the lowest level in more than two years.
The Pratt & Whitney plant in North Berwick employs over 2,100 people and covers more than 1 million square feet, making it the largest manufacturing facility under one roof in Maine.
The facility produces 850 parts and 30 different sub-assemblies for commercial and military jet engines. It also is one of only a dozen or so Pratt & Whitney sites worldwide that perform maintenance, repair and overhaul (MRO) of the GTF engine, a turbofan system used by more than 60 airlines.
After a recent $12.5 million investment in the North Berwick plant, it now performs maintenance on high-pressure turbines and high-pressure compressors for the GTF.
Editor's Note: Mainebiz staff contributed to this report. The Hartford Business Journal is an affiliate publication of Mainebiz, and both are owned by New England Business Media.
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