Disappointed at losing three large US DoD arms deals worth $12 billion to Boeing, Lockheed Martin is counting on a potential Terminal High-Altitude Area Defence (THAAD) sale to Saudi Arabia worth $15 billion to increase its sales and profits.
The US Navy awarded Boeing a $2.38 billion contract to replace the Air Force’s H-1 Huey helicopters and a $9.2 billion T-X trainer jets deal besides an $805-million contract this year to build the first four unmanned carrier-based aerial refueling tankers, the MQ-25A Stingray. Lockheed Martin was a contender in all three contracts.
In a conference call with Wall Street analysts yesterday, Lockheed Martin CEO Marillyn Hewson, said that the Pentagon preferred affordability over technical offerings. “Had we matched the winning prices and been awarded the contracts, we estimate that we would have incurred cumulative losses across all three programs in excess of $5 billion,” she added.
Bruce Tanner, Lockheed Martin’s chief financial officer said during the call, “the largest order we’ve been waiting on obviously is for THAAD. That has not taken place yet. Not sure when that will take place. The interesting thing with the THAAD order is, while it brings a significant increase in backlog, the resulting sales, profit, and cash flow are very much pushed to the right.”
The US State Department had approved a $15 billion deal in October 2017 for Saudi Arabia to purchase 44 Terminal High THAAD launchers and 360 missiles, as well as fire control stations and radars. In the ensuing months, the Trump administration has been pressuring Saudi King Salman to conclude the deal with the US President even stating that the King would not last for two weeks without US support.
However, defence industry sources suggest that Saudi Arabia is having second thoughts about buying the THAAD as recent missile attacks by Yemen based Houti rebels require a missile defence system capable of shooting down low-altitude, shorter range missiles. The THAAD affords defence against long range ballistic missiles which none of Saudi’s adversaries in the region have.
It is for this reason that Riyadh has entered into a memorandum of understanding with Russia to buy its S-400 system which can defend against short and medium range missiles besides fighter jets.
As Saudi Arabia has so far not signed up to buy the THAAD it is under no commitment to pay up for the Lockheed-made system.
Germany announced a freeze in arms sales approvals to Saudi Arabia and urged its fellow European Union members to do the same over Riyadhs admittance that its security team killed journalist Jamal Khashoggi. Economy and Energy Minister Peter Altmaier told ZDF television that the German government would not approve any new arms sales to Saudi Arabia and would urge other EU member states to follow this example
US Forces, Korea has officially set up the unit charged with operating the Terminal High Altitude Area Defense (THAAD) battery deployed in the country. A ceremony was held in the southeastern county of Seongju on Thursday to transfer the Delta Battery of the 11th Air Defense Artillery Brigade in Fort Bliss, Texas, to the 35th ADA Brigade in South Korea,
The US State Department has approved an estimated $15 billion Sale to Saudi Arabia for Terminal High Altitude Area Defense (THAAD) and related equipment and services for an estimated cost of $15 billion. THAADs exo-atmospheric, hit-to-kill capability will add an upper-tier to Saudi Arabias layered missile defense architecture and will support modernization of the Royal Saudi Air Defense Force (RSADF)
Hyundai has stopped auto production at its four factories in China as tensions between South Korea and Being rose over US deployment of Terminal High Altitude Area Defense anti-missile system. All four of its factories that have been in operation in China had stopped manufacturing vehicles as of Tuesday after a local parts supplier refused to supply components when Hyundai delayed payment
Lockheed Martin has won a $946 million contract to supply Terminal High Altitude Area Defense (THAAD) systems to the Kingdom of Saudi Arabia (KSA). Under this undefinitized contract action, Lockheed Martin will provide THAAD FMS KSA Phase I long lead items, obsolescence, tooling and test equipment, key personnel, line requalification activities, initial training development, System Integration Lab and testbeds, three-level maintenance concept, exportability, and early engineering development, the US Missile Defense Agency said in a statement Monday
Lockheed Martin has won a $129million contract to provide maintenance and sustainment for two Terminal High Altitude Area Defense Batteries for the United Arab Emirates (UAE). The contract includes software and hardware development, contractor logistics support, engineering services, and missile field surveillance, US DoD said in a statement on Wednesday
Boeing has won a $20 million contract in support of the United States Navys T-45 aircraft Service Life Extension Program (SLEP). The modification exercises an option for the production and delivery of SLEP retrofit kits and support equipment/special tooling, as well as retrofit engineering and logistics to support the installation of associated technical directives, the US Department of defense said in a statement Wednesday
Boeings Defense, Space & Security businesss third-quarter 2018 revenue increased to $5.7 billion, up from $5,050 for the same period last year; driven by increased volume across government satellites, KC-46 Tanker, F/A-18 and weapons
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