THAAD Sale Highlights Demand For Missile Defense Capabilities
Lockheed Martin announced Dec. 30 the first international sale of the Terminal High Altitude Area Defense system to the United Arab Emirates.
Company officials heralded the $1.9 billion sale as the first in a likely series of contracts with U.S. allies seeking protection from rogue nations.
“With regional threats in the Middle East and uncertainties in North Korea, the demand for capable missile defense is stronger than ever,” Dennis Cavin, Lockheed’s corporate business development vice president, said during a Jan. 3 conference call with defense reporters.
Several other foreign governments are “in talks to purchase these,” he said, but would not specify which countries.
Company officials also described the deal as a job creator that will reduce overall cost of production for missile-defense systems for both the U.S. and foreign allied militaries.
“The UAE is a very strong partner in the region,” Cavin said. “With this capability, they will have a very robust integrated missile defense architecture — perhaps the best in the world.”
The Arabian nation is only 34 miles away from Iran at the Persian Gulf’s narrowest point in the Strait of Hormuz. Iran this week has conducted a series of missile tests in that area and has threatened to shut down the strait in the face of threatened sanctions against its oil industry.
Lockheed has contracted to build 96 of the hit-to-kill missile interceptors, and provide support equipment and training to the Arabian nation. Company officials would not say when delivery to the UAE would begin, citing the country’s national security concerns.
Once in place, the UAE’s missile defense system will deliver “the same capability the U.S. system has,” said Cavin.
Already contracted to build several-dozen missile interceptors for the U.S. military, the UAE sale will nearly double the company’s production rate at its Troy, Ala., facility from the current rate of five THAAD systems per month, said Tom McGrath, program manager and Lockheed vice president. It could also add as many as 50 employees at that facility, doubling the program’s work force, he said.
“When we built the factory at Troy, we planned for substantially higher build rates than where we were,” said McGrath. “But we will have to add tooling and test equipment and more people.”
The interceptors don’t carry warheads, instead relying on the kinetic energy of the interceptor itself to destroy missiles in mid-air.
The total value of the sale is $3.4 billion, $1.9 billion of which is Lockheed’s share, Cavin said. The balance is for the manufacture of components by subcontractors.
“This is a milestone as we look at the development of this missile defense program,” Cavin said.
The batteries will augment the UAE’s current PAC-3 “Patriot” missile defense system, which it bought from the United States beginning in 2008. That platform is both an air-defense and short-range missile-defense system also fielded by many U.S. allies including Japan and South Korea. The THAAD system is strictly anti-missile, but provides a much wider footprint than the Patriot, Cavin said. It also can strike targets both within and outside the Earth’s atmosphere.
The Defense Department contracted for two THAAD batteries in 2006 totaling 48 missile interceptors. Delivery of those batteries should be completed this summer, said McGrath. The following two batteries, with another 48 interceptors, should start delivery soon thereafter, ending in 2013. The contract for a further set of 48 missiles, which would begin delivery in 2013, will be negotiated over the next three months. That is threatened by budget constraints, McGrath said.
Moreover, an increase in production rate as a result of foreign military sales should decrease the overall cost of missile defense systems for the United States and its allies, Cavin said.
“Very clearly a robust [foreign military sales] program provides direct support to the U.S. government and its armed forces,” Cavin said. “Greater FMS sales provide an advantage in that you can increase total quantities for lower cost,” he said.