Iran, N.Korea spur PAC-3 missile demand - Lockheed http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-08-23T232702Z_01_N23363584_RTRIDST_0_ARMS-MISSILE-LOCKHEED.XML&rpc=66&type=qcna
Wed Aug 23, 2006
By Jim Wolf
WASHINGTON, Aug 23 (Reuters) - Fears of North Korea and Iran seem to be spurring broad interest in Patriot PAC-3 missile upgrades, an executive of Lockheed Martin Corp. (LMT.N: Quote, Profile, Research), the prime contractor, said on Wednesday.
The Patriot Advanced Capability-3 (PAC-3) missile is described by the company as the world's top defense against tactical ballistic missiles that could carry nuclear, chemical or germ weapons as well as cruise missiles and aircraft.
Nine nations have bought a version of the Patriot air defense system that entered production in 1980 -- Saudi Arabia, Kuwait, Japan, Taiwan, Greece, Germany, the Netherlands, Israel and Spain. Raytheon Co. (RTN.N: Quote, Profile, Research) is the systems integrator.
"So all of these guys are interested in this (upgraded) capability," said John Ward, vice president of international business development for Lockheed's Orlando, Florida-based Missiles and Fire Control unit. An upgraded Patriot PAC-3 battery, including radar, could cost $500 million, depending on how many launchers were included, he said.
Ward spoke to Reuters after a briefing on Lockheed's role in the multibillion-dollar, layered, U.S. shield against missiles of all ranges in all stages of flight.
The company declined to comment on the potential value of its missile-defense business or its share of annual revenues.
Bethesda, Maryland-based Lockheed, the Pentagon's No. 1 supplier, announced its first international sales of PAC-3 missiles in January 2005. As part of a $532 million contact with the U.S. Army, it said 32 missiles would go to the Netherlands and 16 to Japan, of a total 156 due to be delivered to the army this year.
Ward said Japan asked for speeded-up delivery of its PAC-3 missiles after North Korea test-fired seven missiles starting on the July 4th U.S. Independence Day holiday despite an international push to dissuade Pyongyang.
In addition, Japan has written to the United States seeking cost and pricing data on 16 more PAC-3 missiles, doubling its possible purchase, he said. "And I think that was a direct result of this firing of the North Korean missiles," Ward said.
In a related move, the United States is sending PAC-3 interceptors to Kadena Air Base on the southern Japanese island of Okinawa, the Japanese Foreign Ministry said last month.
Turkey and other neighbors of Iran -- under pressure from the international community over its suspected nuclear weapons program --have also shown growing interest in possible PAC-3 "Missile Segment" upgrades to the Patriot air defense system. The upgrade includes the missile, software and enhanced launcher electronics.
"We've been in serious discussions with the Turkish authorities," Ward told the briefing. He said Lockheed was seeking Turkish partners for co-production as part of a proposed technology-transfer deal.
"There are a lot of Middle East customers who had previously not expressed interest (in PAC-3 upgrades) who have now asked for data and are coming to witness firings," he added in the interview with Reuters.
Another beneficiary of current tensions is Lockheed's Aegis sea-based missile defense. Involved are upgrades to U.S. and Japanese warships to track and, if necessary, shoot down ballistic missiles.
"There's always discussions going on," said Chris Myers, vice president of Lockheed's Moorestown, New Jersey-based Maritime Systems & Sensors business unit, referring to ballistic missile upgrades for other countries.
The Aegis combat system is deployed on 80 ships worldwide, including in Japan, South Korea, Norway, Spain and Australia. Japan will begin installation of the Aegis on up to four of its Kongo-class destroyers.
The U.S. Navy, for its part, plans to have outfitted six of its warships by the end of this year. All told, 15 U.S. Aegis-equipped destroyers and three Aegis cruisers are planned.
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