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January 31, 2012

IAI, Boeing Ready Arrow For Export — to S. Korea?

(IMRA) : Armed with marketing approval by their respective governments, a
U.S.-Israeli industrial team plans to offer the Arrow weapon system to South
Korea as a first, potential export of the joint ballistic-missile defense
system.
Executives from Boeing and state-owned Israel Aerospace Industries (IAI),
partners in production of the Israeli-designed Arrow-2 and planned Arrow-3
interceptors, said Boeing would lead marketing and negotiating in South
Korea.
The potential deal, estimated to exceed $1 billion, would ultimately be
concluded between the U.S. and South Korean governments and managed as a
Pentagon Foreign Military Sale, defense and industry sources here said.
“There’s still a long way to go, but we and our Israeli partners are working
very persistently to be able to provide this phenomenal capability to South
Korea, an important U.S. ally,” Roger Krone, president of Boeing Network &
Space Systems, said during a recent visit here.
Last week, Boeing and IAI announced an agreement to expand their 10-year
partnership beyond joint development and production of Arrow-2 and Arrow-3
interceptors for Israel’s defense needs.
The Jan. 23 announcement did not name countries to be targeted by the new
strategic agreement. It noted that the agreement “aims to explore and
develop new opportunities in the missile defense arena.”
IAI President Itzhak Nissan heralded the agreement as “the next logical step
in our relationship with Boeing, and a strong opportunity for both companies
to play a bigger role in the missile defense market.”
“The Arrow program demonstrates Boeing’s commitment to develop international
missile defense partnerships around the globe,” Krone said in the joint
announcement.
Similarly, Greg Hyslop, vice president and general manager of Boeing
Strategic Missile and Defense Systems, said the Boeing-IAI partnership “has
produced an innovative, versatile and affordable advanced missile defense
capability.”
During a visit here last month, Krone declined to speculate when the South
Korean Defense Ministry would request proposals or which competitors might
respond.
He also wouldn’t say whether Boeing-IAI would bid the operational Arrow-2 or
the smaller, less expensive, exo-atmospheric Arrow-3, now in development and
scheduled for its first fly-out test later this year.
Defense and industry sources noted that South Korean military planners late
last year launched a so-called assessment of alternatives that included
Arrow-2, the Terminal High Altitude Area Defense system, the Patriot PAC-3
and the Russian S-300 and S-400 systems.
South Korea bought 48 used PAC-3 launch modules, radars and missiles,
including the Patriot Anti-Tactical Missile and Guidance Enhanced Missile
Plus (GEM+) from Germany.
In 2009, Seoul’s Defense Acquisition Program Administration decided to buy
two EL/M-2080 Green Pine radars — the same radars supporting Israel’s
Arrow-based national missile defense system — from Elta Systems, an IAI
subsidiary. Operational deployment of the radars is slated for this year.
The radars will be part of South Korea’s Air and Missile Defense-Cell, a key
component of the nation’s low-tier air and missile defense system to counter
the threat posed by North Korea’s low-flying, short- and intermediate-range
missiles, officials said.
While Israel is pushing ahead with the sale of the Arrow, the South Korean
government has made no effort to introduce a high-altitude interceptor
because of fears over potential backlash from neighboring countries,
including China.
And South Korea has been on track to build its own low-tier and medium-range
missile defense systems. Last month, the state-funded Agency for Defense
Development unveiled the Cheongung system, a medium-range surface-to-air
missile system.
For the longer term, defense and industry sources here said India is a
potential export market for the U.S.-Israeli AWS, given the Pentagon’s
willingness to restart missile defense cooperation talks with New Delhi.
A potential sale or joint production of missile defense systems was an
agenda item for the U.S.-Indian strategic dialogue that began in 2003, but
the talks were suspended in 2008. During a visit this month to New Delhi,
Robert Scher, U.S. deputy assistant secretary of defense for South and
Southeast Asia, offered to revive such talks, a Pentagon spokeswoman
confirmed.
“We are really open to it. This is something we ask them if they are
interested in,” Scher was quoted as saying in a Jan. 19 report by the Press
Trust of India.
Asked to clarify Scher’s reported remarks, Navy Cmdr. Leslie Hull-Ryde, a
Pentagon spokeswoman, said, “We have not discussed ballistic-missile defense
cooperation since 2008 and are currently focused on a range of other higher
priorities, including maritime security. However, should India express
interest in restarting discussions on [ballistic missile defense], we would
be prepared to discuss it.”
U.S. and Israeli sources said neither the U.S. government nor Israel’s
Ministry of Defense has approved any marketing efforts or technical
discussions on potential Arrow exports to India. Nevertheless, they note
that India has the need, potential funding and the favorable political
standing with Washington and Tel Aviv to support such a deal.
Israeli industry sources noted that India bought the Arrow’s Green Pine
radars in support of a two-tier, indigenous intercepting system based on the
Prithvi missile. In the past decade, Israeli exports to India have accounted
for nearly $2 billion annually, including radars, air-launched missiles,
tank upgrades, and land- and ship-based air defense systems.
“If the U.S. government allows ballistic-missile defense exports to India,
it will represent a very inviting prospect for the IAI-Boeing team,” said
Uzi Rubin, a former director of Israel’s Missile Defense Organization. “I
don’t see the U.S. refusing us the opportunity to export Arrow if the other
U.S. systems are allowed to compete.”
Jung Sung-ki contributed to this report from Seoul.

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