Mike Stone
(Reuters) – Lockheed Martin has won a $17 billion contract to develop the next generation of interceptors to defend the United States against intercontinental ballistic missile attacks, the U.S. Missile Defense Agency said on Monday.
The interceptor program aims to counter current ballistic missile threats and future technological advances from countries such as North Korea and Iran.
The victory represents a shot in the arm for Lockheed after the United States said it wanted to cut orders for the F-35 and the Army in February abandoned development of the Future Attack Reconnaissance Aircraft, the next-generation helicopter for which Lockheed had submitted a design. .
The multi-year missile contract covers the development of a Next Generation Interceptor (NGI) to modernize the Ground Medium Range Defense (GMD) program. The network of radars, interceptors and other equipment is designed to protect the United States from intercontinental ballistic missiles.
Lockheed shares rose 0.60% to $462.08 on Monday.
Lockheed is “committed to delivering reliable interceptors,” said Sarah Hiza, general manager for strategic and missile defense.
The first interceptor is expected to enter service in 2028.
NGI is currently in the technology development phase and will move into product development in May, according to written testimony last week from Missile Defense Agency chief Lt. Gen. Heath Collins. The US plans to purchase 20 interceptors and station them at Fort Greely in Alaska.
Collins said the agency would choose either Lockheed or Northrop Grumman (NYSE:) for the program. In 2021, separate contracts for the development of projects were concluded with companies.
In 2019, the Pentagon abandoned Boeing’s (NYSE:) Co. contract for a “killer machine” – an interceptor tip that detaches in space and destroys an incoming warhead – due to technical design problems, spending $1.2 billion on the project. dollars. .
The United States then decided to reopen the contract process to gather bids for the entire interceptor. Boeing dropped out of the competition in 2021.
The government estimates that the next generation interceptor program will cost about $17.7 billion over its lifetime.
The Biden administration has requested $28.4 billion for missile defense in its fiscal year 2025 budget, Collins said.
Work on the GMD began in the late 1990s, and after spending approximately $40 billion in research and development, it was declared operational in 2004.
However, just over half of the system’s interception tests were successful, and in 2023 the Pentagon’s Office of the Director of Operational Test and Evaluation said the GMD could protect against “a small number of ballistic missile threats.”
In January, Lockheed forecast its 2024 profit below Wall Street expectations as the defense contractor’s largest aviation segment, which makes the F-35 jets, faces supply chain challenges.
Reuters reported that Lockheed will cut 1% of its jobs through 2024 as it seeks to cut costs and streamline operations.
US defense giants have benefited from robust demand for weapons amid increased geopolitical tensions over the past two years. Sales of U.S. military equipment to foreign governments rose 16% in 2023 to a record $238 billion.