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September 6, 2012

Boeing sees sales of joint U.S.-Israeli missile shield


(Reuters) - Boeing Co (BA.N) foresees global demand for a ballistic missile-defense shield it is co-developing to help guard Israel, the head of the company's military business said on Tuesday.
Israel is getting set for the first full flight test of its Arrow anti-missile system using a new high-altitude interceptor called Arrow 3.
"As we prove out that technology, and show that it's not only affordable but effective, we think there will be additional global market opportunities for that capability," Dennis Muilenburg, chief executive of Boeing's defense, space and security arm, told Reuters.
Boeing thinks that potential markets may include India, Singapore and South Korea, a company official said in a followup telephone conversation.
The United States and Israel have been jointly developing Arrow since 1988. Boeing's counterpart on the project is state-owned Israel Aerospace Industries.
Arrow 3, the system's highest-altitude component, which operates outside the atmosphere, is expected to be deployed by 2014, according to the U.S. Congressional Research Service.
The capabilities to be demonstrated in the coming test include searching further and higher for missiles of the type being designed and tested by Iran. No intercept of a simulated enemy design is scheduled in the upcoming test.
Boeing is set to produce half or more of the Arrow 3 interceptors in the United States, with Israel doing the integration. A key selling point, Boeing believes, would be the system's relative affordability.
Lockheed Martin Corp (LMT.N) makes a rival missile shield called the Terminal High Altitude Area Defense.
So far, THAAD's only foreign sale has been to the United Arab Emirates. Lockheed Martin received a $1.96 billion U.S. government contract last December to produce two THAAD weapons systems for the UAE.
Any overseas sales of the Arrow system would be on a similar government-to-government basis.
Muilenburg said another likely selling point would be the potential for a buyer nation's industry to be involved in production.
"That's a technology area where many countries are interested in building up their own industrial capacity in addition to providing the defensive capability," he said.
The total U.S. financial contribution to progressively improved versions of the Arrow system tops $1 billion, the Congressional Research Service said in a March 12 report to lawmakers.
The Obama administration's fiscal 2013 budget request includes $99.8 million in joint U.S.-Israeli co-development for missile defense, a sum that U.S. lawmakers have moved to more than double in the ongoing budget process.

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