WASHINGTON — Lockheed Martin is seeing increased international interest for its air- and missile-defense products and projects slow but steady growth as more countries opt to purchase their own systems, an executive told Defense News.
In the coming years, the company expects to win competitions in Europe and the Middle East for technologies like its Terminal High Altitude Area Defense (THAAD) system, Medium Extended Air Defense System (MEADS) and Patriot Advanced Capability (PAC-3) interceptor. But Rick Edwards, executive vice president of Lockheed Martin Missiles and Fire Control, believes there is a lot of room to further grow that customer base.
"Because of the nature of the threats and because PAC-3 and THAAD and MEADS are all defensive systems, there's good US government support for these sales," he said in a July 12 interview at Farnborough International Airshow. "That's the part of the portfolio that's seeing the most growth around the world."
Although much of the speculation surrounding Lockheed's potential foreign military sales centers on high-visibility platforms like the F-35 joint strike fighter or the littoral combat ship, the company's missile and fire control division is responsible for about 50 percent of its international purchases, Edwards said. That portfolio spans air and missile defense, short- and long-range missiles, unmanned aerial systems, sensing and targeting pods and vehicle offerings.
"Think of that in terms of $3.5 billion a year on probably about 30 programs in 28 countries," he said.
Lockheed is most bullish on the international potential of THAAD, designed to destroy short-, medium-, and intermediate-range missiles in mid-air. The United States and United Arab Emirates are the only current buyers, but that could change in the near future.
The company is in talks with Qatar and Saudi Arabia about potential purchases of a THAAD system, and the countries will likely make decisions in the fiscal years 2017-2018 timeframe, Edwards said. Beyond that, Lockheed is targeting at least half a dozen more countries that have interest in the system because of homeland-security concerns.
"If you look at the world and look at the threat either from North Korea or Iran, you can sort of draw a map and say, 'Where would a ballistic missile from those bad actors fly over'," he said, declining to elaborate on which countries are considering a purchase. "We do think there is more market share out there, but these are big decisions. They are big budget drivers in the countries, so they don't happen overnight."
The company is also in discussions with a number of countries on MEADS, a missile defense system with a 360-degree field of view designed to defeat short- and medium-range ballistic missiles. MEADS was jointly developed by the US, Italy and Germany. Ultimately the United States decided not to procure the system for the time being, leaving it dependent on foreign orders.
Germany in 2015 selected MEADS for its Taktisches Luftverteidigungssystem (TLVS) program, beating out Raytheon's Patriot system. Lockheed is in the process of submitting its proposal to the German government and hopes to be under contract by the end of the year, Edwards said.
Turkey and Poland have also expressed interest in acquiring MEADS. Turkey initially planned to procure a Chinese air and missile defense system, but scrapped those plans. Procurement officials announced earlier this year that Ankara was considering buying MEADS instead.
Poland initially had chosen Raytheon's Patriot over MEADS, citing concerns about the Lockheed system not being fielded. But this February, reports surfaced that Lockheed was back in negotiations with Poland over MEADS. The country will likely make a final decision on which system to buy in 2017, Edwards said.
Both Poland and Turkey are greatly interested in work-share arrangements that would allow domestic firms to produce parts of the system, he said. Lockheed is in discussions with both countries about co-developing a secondary interceptor with local defense contractors that would cost less than the system's primary interceptor, the PAC-3 missile segment enhancement.