National Defense Magazine:
U.S. defense firms are stepping up their marketing game in Europe as they seek to boost sales of big-ticket missile defense systems.
The U.S. government has committed to funding and deploying a European missile shield to protect the continent from Iranian ballistic missiles. But as Europe faces the prospect of continuing Russian aggression, several nations are weighing new investments in antiballistic missile systems.
“Russia now looks less likely to ‘invade’ another ex-Soviet territory [but] its behavior could still prove a serious test for NATO,” said industry analyst Robert Stallard of RCB Capital Markets. “In our view, the increased recognition of a Russian threat is likely to stabilize European defense spending, with those nations closest to the Russian border probably moving up the most.”
For U.S. missile defense powerhouses Raytheon and Lockheed Martin, the fight for overseas deals has primarily focused on the Middle East, where countries that are friendly to the United States have been buying billions of dollars worth of American-made missile defense systems in an effort to thwart Iran’s military influence in the region. But Europe is now commanding more of the industry’s attention.
As the Paris Air Show gets under way this week, Lockheed is cheering Germany’s decision to become the first country to buy MEADS, the medium extended air and missile defense system that competes with Raytheon’s Patriot.
The German Federal Ministry of Defense announced last week it selected Lockheed’s MEADS for its next generation tactical air and missile defense system, known as Taktisches Luftverteidigungssystem. The TLVS would replace Germany’s 12 air-defense Patriot batteries made by Raytheon. Lockheed is teamed with the German firm MBDA Deutschland.
MEADS was conceived in the 1990s as a Patriot replacement and its development was initially funded by Germany, Italy and the United States. The U.S. Army later lost enthusiasm for the program and backed out in 2011 despite an aggressive campaign by Lockheed to keep it going. Germany’s announcement gives the program new life.
Although Patriot won a tightly contested deal in Poland, Raytheon sees the defeat in Germany as an ominous sign that a new competitor could eventually challenge Patriot’s dominance. Raytheon got a big boost when Patriot was selected last year by Poland as the centerpiece of its homeland defense, making it the 14th country that buys the system.
Raytheon Vice President Tim Glaeser said Germany’s decision had caused “angst” in the company and insisted that Patriot is not completely out of the running.
“Raytheon will continue to support the German government as they consider alternatives before their final contract award [to MEADS] in 2016,” Glaeser told reporters June 10. “Germany will remain a Patriot partner,” he said. Raytheon is proposing a modernization program for Germany’s current Patriot systems so it is up to date with the latest technology, he said. The newest “configuration 3” Patriot uses Lockheed’s PAC-3 missiles as interceptors.
Industry analysts said it is unlikely that MEADS will pose any immediate threat to Patriot as long as the latter continues to be in use by the U.S. military, as many countries prefer to buy missile defense systems that are interoperable with the United States and for which the Pentagon can provide logistics support and training…
