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Lockheed’s Anti-Missile System to Be Canceled in 2013

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Feb. 14 (Bloomberg) -- The Pentagon today said it would terminate a multinational missile defense program being developed by Lockheed Martin Corp. in collaboration with Italy and Germany.

The Medium Extended Air Defense System, or Meads, will be canceled when the current contract ends in 2013, Defense Department comptroller Robert Hale said in a news briefing.

Continuing with the program would have required as much as $1.16 billion additionally for the five-year period ending 2017, according to a Pentagon fact sheet. “The U.S. cannot afford this additional research and development funding,” the fact sheet said.

It said that the system, designed to shoot down short- and medium-range missiles, had “experienced a number of technical and management challenges since its inception in the mid-1990s.”

The money freed up by terminating the Meads program will be used to buy additional Stinger and Patriot missiles, U.S. Army Major General Phillip McGhee said at a Pentagon news conference.

The Meads system had grown in cost by about $1 billion and its overall schedule delayed an additional 18 months, according to the Senate Armed Services Committee in its version of the fiscal 2011 defense authorization bill, passed by Congress last month.

Joint Funding

The U.S. contributes 58 percent of the funding for the seven-year-old Meads program, in partnership with Germany and Italy. It’s an anti-missile system designed to work within NATO’s command structure that uses the latest version of the Patriot developed by Lockheed Martin and Raytheon Co.

The program’s $4.2 billion development program is managed out of Orlando, Florida, under Meads International LLC, a joint venture of Bethesda, Maryland-based Lockheed, Lfk-Lenkflugkorpersysteme Gmbh of Germany and MBDA of Italy.

MBDA is the world’s second-largest missile maker. MBDA is jointly owned by BAE Systems Plc, European Aeronautic, Defence and Space Co. and Finmeccanica SpA.

To contact the reporters on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net; Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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