Italy Joins Germany in Fight for Lockheed Missile System
Italy has joined Germany to press U.S. Defense Department officials to fight congressional efforts to cut funding for Lockheed Martin Corp. (LMT)’s anti-missile system, known as the Medium Extended Air Defense System.
Defense panels in the U.S. Senate and the House have voted to cut the Pentagon’s $406.6 million request for Meads, which is being developed in partnership with Germany and Italy. The Senate Armed Services Committee in June eliminated the entire request, while the House of Representatives approved cuts of $149.5 million as part of its version of the 2012 defense authorization and defense appropriations bill.
The Pentagon in February said it would terminate Meads when the current contract ends in 2013.
The $4.2 billion development program is managed from Orlando, Florida, by Meads International LLC, a joint venture of Bethesda, Maryland-based Lockheed Martin, Lfk- Lenkflugkorpersysteme Gmbh of Germany and MBDA of Italy. Meads is designed to shoot down short and medium-range missiles.
“I expect that the U.S. DOD will put in place all the necessary actions to ensure that U.S. Congress will provide the required funds to complete the Meads development and meet our mutually agreed commitments within the limits,” of the memorandum of understanding between the U.S., Italy and Germany, according to letter sent today by Italy’s undersecretary for defense, Guido Crosetto, to U.S. Deputy Defense Secretary William Lynn.
Shared Funding
Crosetto said that if the U.S. doesn’t meet its financial obligations “the U.S. shall then be required to bear all the resulting contract modifications and cancellation costs up to the total financial contribution established” in the memorandum of understanding.
The U.S. contributes 58 percent of the funding for the Meads program in partnership with Germany and Italy. It’s an anti-missile system that uses the latest version of the Patriot missile developed by Lockheed Martin and Raytheon Co. (RTN) and is designed to work within NATO’s command structure.
Continuing the program would have required as much as $1.16 billion of additional funding for the five-year period ending 2017, according to a Pentagon fact sheet. “The U.S. cannot afford this additional research and development,” the fact sheet said.
German Request
Crosetto’s letter follows a similar plea earlier this month from a German defense official to Pentagon acquisition chief Ashton Carter, making the case for full development funding for Meads. In the letter, Detlef Selhausen, director of armaments at the German federal ministry of defense, said “joint termination of the current Meads development is not an option for Germany.”
The Obama administration opposes cutting funding for Meads development, telling Congress that could “trigger a unilateral withdrawal” from the agreement by Germany and Italy.
Pentagon spokeswoman Cheryl Irwin said on Friday that the German letter “confirms everything they’ve been telling us for months in direct discussions.”
-- Editors: Steven Komarow, Bob Drummond
To contact the reporter on this story: Roxana Tiron in Washington at rtiron@bloomberg.net.
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.
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