Lockheed missile system snags South Korean deal
By Richard Burnett | Orlando Sentinel | Published: August 4, 2013
Lockheed Martin Corp.'s Orlando missiles operation has landed a foreign arms deal potentially worth $223 million to provide South Korea with advanced helicopter navigation and weapons-targeting equipment, the U.S. Defense Department said last week.
The contract, awarded by the U.S. Army, is the latest in a series of foreign-military sales that have helped Lockheed offset the effect of defense-budget cuts related to the federal deficit-reduction measures known as sequestration and the U.S. drawdown of war operations in Afghanistan and Iraq.
Terms of the new deal call for Lockheed to provide South Korea with advanced navigation and weapons-targeting sensors and support services for the Asian country's Apache helicopter fleet.
Lockheed beat two rival bids to secure the new contract, the Defense Department said.
It was the latest deal involving Lockheed's Arrowhead system, also known as the Modernized Targeting Acquisition Designation Sight/Night Vision Sensor. The electro-optical and laser-based system has generated billions of dollars in sales over nearly three decades.
Through contracts with the U.S. Army, Lockheed has already sold Arrowhead to many U.S. allies in Europe and the Middle East.
Arrowhead's direct hit
Arrowhead is a major weapons program for the Lockheed Missiles & Fire Control operation. Hundreds of jobs are tied to the unit's work in Orlando and Ocala.
A next-generation version of the Apache helicopter's original weapons system, Arrowhead essentially doubles the "standoff" range from which pilots can safely launch precision missiles without a threat from enemy fire, according to the company.
International sales of Arrowhead have played a significant role in the company's fast-growing foreign-military portfolio, though the company does not disclose specific revenue figures for the night-vision system. Dallas-based Lockheed Missiles & Fire Control expects foreign arms sales in general to reach close to 40 percent of its total revenue in the next several years.
Lockheed and other big defense contractors have focused on foreign-military deals in recent years amid rising deficit-reduction pressures on U.S. government spending.
More than $85 billion is being cut from the defense budget this year as part of the sequestration law's mandates. That, in turn, has increased pressure on the federal government to approve contractors' foreign-military sales.
Foreign sales boosted
Such deals have doubled since 2009, to 32 as of July 29, according to the Defense Security Cooperation Agency. The contracts' dollar value more than doubled to a record $64 billion last year compared with $30.4 billion in 2009.
From 2002-12, the U.S. has engineered foreign-military sales worth nearly $240 billion, according to the security-cooperation agency.
Foreign sales help U.S. military contractors during downturns in U.S. defense spending, but critics say they also fuel the global arms race and increase the chances of key weaponry falling into the hands of U.S. enemies. Military experts insist such arms sales promote alliances and help stabilize allied governments.
Meanwhile, Lockheed Missiles & Fire Control continues to receive a steady flow of U.S. military contracts.
Lockheed's Longbow LLC partnership with Northrop Grumman Corp. received approval last week for an Army contract modification worth $6.8 million related to advanced radar equipment and unmanned aerial technology for the Longbow Apache helicopter system.
The modification brings the cumulative value of the deal to $182.3 million, according to the Defense Department.