Mr. Chairman, two and one-half years ago, MTI committed to the operational testing of a Mod II engine by January 31, 1986. In late January of this year, we followed through on our commitment by operating a Mod II for the first time in our laboratories. Although there is a substantial amount of testing and component improvement which must be accomplished before this engine will meet all the goals of the program, it is clear that the promise we projected in the past is, indeed, present in this design. With an appropriation of $8 million for FY87, and with the private sector contributing the additional needed resources, we feel that the goals of this program will be met by the end of 1987, as we have projected for the last three years. This is, of course, predicated on the Congress rejecting the present recisions/deferrals. If these are not rejected, the resulting dramatic negative effects could cause the program to need as much as two additional years to reach the legislative goals. To restate those goals briefly, the Mod II and derivative engines are expected to meet the original environmental standards for 1985 (NO < 0.4, HC < 0.41, CO < 3.4 gm/mi, and particulates< 0.2 gm/mi) and to show a 30% or greater improvement in gas mileage over comparable production engines, interchangeable operation on a variety of liquid fuels, reliability and life expectancy comparable to production engines, initial cost and life cycle cost comparable to production engines, acceleration suitable for safety and consumer considerations, and noise and safety characteristics meeting federal standards. Perhaps the most important programmatic aspects of the past year are the increased industrial interest and the beginning of serious industrial participation in this program. Deere and Company is now actively involved with us in building the Mod II engines. They are cofunding this effort at a 25% level and have provided such items as a candidate Mod II engine block at their own cost. The Mod II parts being built by Deere are being produced using production-type tooling in engine production facilities. This is clearly the first step in the transitional process from government funding to private sector investment and commercialization, but it will be lost if FY87 funding is not forthcoming. Two more promising events have been the Army's acceptance of a Stirling-driven generator set for testing at the Fort Belvoir R&D center and the Air Force's initiative to test a Mod I in a flight line van. The Army has severe problems in encampments and other field posts from the noise generated by current generator sets. The quietness of the Stirling, as well as its high efficiency, fuel flexibility, and paucity of needed spare parts are attractive to the military. Similarly, the Air Force has done a study (without our help) which leads to 23 specific reasons why Stirling engines (when fully developed) should be the propulsion units for Air Force ground vehicles. These reasons range all the way from high efficiency, low noise, and multifuel capability to low IR signature. Product Other positive side effects from this program are the many other potential applications of Stirling technology which are now becoming evident. developments are now under way for heat pumps, cryogenic refigerators, space power generators, multifuel stationary engines, and high-efficiency oil-free pumps. In addition, the program has produced a wealth of scientific and technical information which is publicly available and applies to a broad cross section of technological applications. As part of this program, major advances have been made in materials, controls, combustion, heat transfer, regenerators, ceramics, seals, casting, and computer analysis. This technology base is available to researchers nationwide for applications to numerous fields of endeavor. The appropriation of $8 million, then, and the rejection of the deferrals/ recisions will lead to the successful conclusion of the Stirling Engine development contract during FY87. We would also advocate a continuing program in Stirling engine technology, involving a number of contracters, to ensure that the United States maintains its leading position in this technology. This would be consistent with the fact that the United States has basic research and development efforts ongoing in many government agencies in both diesel and turbine technology. Now that the Stirling potential has been established, it too should be addressed with continuing technology base programs for the same reasons that we fund both diesel and turbine efforts. For example, the external burning feature of a Stirling makes it the most attractive engine option for the direct use of coal. It would be in the national interest to pursue this application. Our recommendation, then, is that in FY87 a technology base program should be established in the $4 million range. This would be sufficient to attract other contractors and would begin to broaden the Stirling capability base. These funds would be over and above the $8 million needed to complete the Automotive Stirling Engine Development contract. It should be mentioned that the promise and success of Stirling development efforts have not been overlooked by the Japanese. During the past year, we have been given information on a number of ongoing efforts within that country aimed at evolving a variety of Stirling-based products. It is our understanding that two major Japanese automotive companies have ongoing efforts to evolve automotive Stirling engines, with plans for commercialization within five years or so. In this environment, the Japanese have admitted that the United States still has the lead in this technology. However, we are now clearly in a difficult race with a considerable amount at stake. In closing, Mr. Chairman, I would like to quote from an editorial by Morton Zuckerman, Chairman and Editor-in-Chief of U.S. News and World Report. The editorial was published on December 23, 1985. Zuckerman stated: "The high technological edge enjoyed by Americans in the 1950s and And continuing: "Any political leader or party wishing to lead America will have to Mr. Chairman, I thank you for the opportunity to present these thoughts to you and your Subcommittee. Senator EVANS. Thank you. Dr. Ridgway is next. Dr. LLOYD LAWRENCE. Mr. Chairman, may I ask you a brief question? Unfortunately, the situation is that a 4:10 airplane is going to make my family very, very happy. Could I possibly have questions submitted for the record and I will be happy to answer them. Senator EVANS. Surely. Or let me ask a couple of questions right now and we will let you on your way. I think I appreciate the opportunity to get back to a family on rare occasions more than you can possibly know. So I sympathize with you. Dr. LLOYD LAWRENCE. Thank you. Senator EVANS. It seems to me, and I'm a little quizzical about your statement on heat pumps. If, indeed, it is something, as you say maybe conservatively, a $15 billion-a-year industry and you are talking about only a 3-year program which presumably would get us to the point where we begin to tap into that kind of a commercial venture, and if the total cost is $20 million a year for 3 years, I cannot understand why industry is not thirsting to chase each other out to grab that market. I bet I could come up with a whole lot of other examples where single companies or a combination of companies, through an industry association, have put up a lot more money than that to come up with a commercial technology in the market that is a lot less than $13 billion a year. Why is that not happening here? Dr. LLOYD LAWRENCE. I think that is happening here. I would like to say, Mr. Chairman, that if you have personal knowledge of folks that might be helpful here, we would be more than happy to work with them. We have tried very hard to work with the private sector at this point, and the problem is we are at least 3 years away in our own case-there are like several other contractors like us in similar situations-we are 3 years away from what we would call a preproduction prototype. At that point you are not really even in the business. At that point you are making a tooling-up decision, which means more expenditure and you are really only in the business about 2 years after that in terms of selling anything and getting your return. In fact, it was the first week in March I had a big meeting at our plant where we worked very hard. We had a couple of bank presidents and we had some manufacturing and industry people right at the top of manufacturing industry, and a couple of people who tend to invest in the $5 to $10 million block category that we invited to our place. In fact, we had a total of 14 of them there. I went through this precise program on our prototype talking about the fact that it was 3 years to preproduction and we spent a whole day with these people on this. And when we got to the point where we told them exactly the timeframe and the dollars, we had people reaching for airplane tickets and people asking what the travel arrangements were, and irate people asking me why I had brought them all this way for something that was 3 years out of preproduction prototype. So it has been a little bit of a frustrating experience in attempting to lure these fellows. I think it is, unfortunately, a situation where there are a lot less riskier things to do with money that have a lot shorter time return, like, buy a company; that is the di rection the country is going right now. It's just not headed toward these riskier things, regardless of the amount of payoff at the end. Senator EVANS. Maybe we ought to send some of our people to different MBA schools than Harvard and Stanford that are turning out that kind of management. On the Stirling engine, this is, I know, at least the third report I've sat in on where you have testified on the progress which, in each case, appears to be quite substantial. But what is your outlook again on this one? How far are we away? You say the progress has been very substantial. You are getting the transitional process from Government funding to private sector investment in commercialization. But it will all be lost if fiscal 1987 funding is not forthcoming. How much funding would be required for a continuation from Government in your company for this particular product? Dr. LLOYD LAWRENCE. We have been consistent for the last 2 years in that, I believe, Mr. Chairman. We are consistent one more time. Fiscal 1987 would be the last year for the main program. We are asking for $8 million for fiscal year 1987. I might point out that we expect the private sector to pick up the additional $4 million that would be needed to complete the program in fiscal year 1987 through a variety of sources. Senator EVANS. To finish the program? Dr. LLOYD LAWRENCE. Yes. We have been consistent in that in the last 2 years and we are consistent again. Fiscal 1987 will be the last year of the automobile Stirling engine program. I might point out that- Senator EVANS. What do you have in hand for fiscal year 1987? Dr. LLOYD LAWRENCE. At the end of fiscal year 1987 we will have the MOD II pretty well developed. It should be to the point where it would be attractive enough to the private sector that we can move on with that. We feel it truly will be. I have a chart on page 10 of the testimony basically showing the kinds of progress we have made in the 8 years of the program, reducing things like the weight power from 14 pounds of horsepower down to 5.5, reducing the costs way down and taking a lot of the unreliable aspects of the engine into making them reliable. So we truly feel that we will be there. It will be time for the private sector to pick it up in fiscal 1988. I might point out at this time, Mr. Chairman, we are under the deferral thing, and we have in fact gone through a layoff last week. So we had laid off some of the folks that represent the world's leading group in this technology. If the deferral is not reversed, then I don't think any of this makes too much sense because we will simply have to eliminate what the country presently has in this capability. Senator EVANS Do you have an interest at this point an interest to the degree of providing any resources for continued advancement from any of the three major automobile companies in the country? Dr. LLOYD LAWRENCE. The General Motors Corp. tends to kind of reflect who you ask there. We have had exactly the kind of support we would hope for from them to date. They have taken one of our automobiles with an engine in it and fully tested it 11⁄2 years ago and have indicated they would do the same with the MOD II. I |