By Sandra I. Erwin, National Defence
Middle East sales of U.S. weapons are slowing down but the Pentagon’s top contractor still views the region as a prime market.
At an international arms show in Qatar last week, Lockheed Martin did not announce any new deals. The company had been expecting to close a multibillion-dollar sale of advanced missile-defense systems to Qatar by now, which appears to be delayed by economic concerns amid a depressed oil market and a persistently strong U.S. dollar.
“Countries that rely on oil revenue as a major economic driver are beginning to show signs of cutting back,” Joe Garland, Lockheed Martin vice president of strategy and business development, told National Defense in a statement.
Despite economic pressures, the Middle East “continues to be a very active market.” In the face of national security threats, he added, “many of our allies are stepping up and taking on a greater share of responsibility for the region’s security, and that tends to energize defense spending,” said Garland.
Lockheed investments in countries’ economies are expected to pay off. “The corporation as a whole has cultivated many partnerships in the Middle East that are yielding local and regional economic benefits,” he said. “We’ll continue to maintain close contact with our customers there to support security needs as well as economic priorities.”
Lockheed leaders are pulling out all the stops as the company strives to increase its foreign sales from 21 percent to 25 percent of overall revenues. Chairman, President and CEO Marillyn A. Hewson so far this year has traveled to Saudi Arabia and the United Arab Emirates.
“During both of those visits, their government leaders made it clear to me that regional security and terrorism are at the top of their concerns,” Hewson told reporters March 15.
Lockheed is negotiating a partnership in Saudi Arabia with Taqnia Aeronautics to build Sikorsky S-70 Black Hawk helicopters in the kingdom. In the UAE, Lockheed last year opened a “center for innovation and security solutions” in Masdar City, in an effort to recruit industrial partners in the region. Hewson said she met with students from Masdar Institute who were participating in a flight simulator scenario-development training program for commercial aviation. In Abu Dhabi, the company struck up a joint venture five years ago with Mubadala for the advanced military maintenance, repair and overhaul center to support the UAE’s F-16 fighters and C-130 cargo planes.
Lockheed in recent years has forecast growth in missile-defense systems in the Middle East. In Qatar, the company has been waiting to seal a $6.5 billion sale of the terminal high-altitude area defense system, known as THAAD. Qatar notified the U.S. Congress in 2012 of its intention to buy the system.
At the DIMDEX 2016 arms show last week in Doha, Qatar, Lockheed Missiles & Fire Control exhibited its Multiple Launch Rocket System family of launchers, missiles and rockets; and hit-to-kill interceptor missiles, including the most advanced version of the PAC-3 interceptor used with the Patriot air defense system.
Garland noted the company signed some significant deals last year such as a $174 million sale of the Army Tactical Missile System for the U.S. Army and the United Arab Emirates, and a $1.1 billion contract for production of PAC-3 missiles for the U.S. Army, Saudi Arabia, the Republic of Korea and Qatar.
