Boeing, Lockheed Martin Benefit From Saudi Arms Package

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["In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist." Dwight D. Eisenhower, 1961 *RON*]

Bill Carey, AIN Online, 22 May 2017

U.S. and Saudi companies will form a joint venture for assembly and completion of 150 S-70 Black Hawks. (Photo: Lockheed Martin)
Boeing and Lockheed Martin are major beneficiaries of $110 billion in arms and services agreements the White House announced during President Donald Trump’s visit to Saudi Arabia. Included in the package, the Saudi government has signaled its intent to buy an undisclosed number of Boeing P-8 Poseidon martime patrol aircraft; another agreement creates a joint venture to assemble 150 Lockheed Martin S-70 Black Hawk helicopters, the defense contractors said.

Trump and Saudi King Salman bin Abdulaziz al-Saud participated in a signing ceremony for the package on May 20 in Riyadh. The package “supports the long-term security of Saudi Arabia and the Gulf region in the face of malign Iranian influence and Iranian related threats,” the White House said. “Additionally, it bolsters the Kingdom’s ability to provide for its own security and continue contributing to counterterrorism operations across the region, reducing the burden on U.S. military forces.”

Late last year during the previous Obama administration, the U.S. stopped sales of precision-guided munitions to Saudi Arabia out of concern for civilian casualties of Saudi-led air strikes in Yemen. A Saudi coalition has conducted thousands of airstrikes against Iranian-backed Houthi rebels since intervening in Yemen’s civil war in March 2015.

Included within the latest arms package, Saudi Arabia signaled its “intent” to procure more than $28 billion worth of Lockheed Martin integrated air and missile defense systems, combat ships, tactical aircraft and helicopters, the U.S. company announced the same day. Lockheed Martin and Taqnia, a Saudi technology development and investment concern, signed a letter of intent to create a joint venture for final assembly and completion of 150 Lockheed Martin-Sikorsky S-70s, an agreement that would create 450 jobs in Saudi Arabia and support a similar number at Sikorsky’s facilities in Connecticut and other U.S. locations.

Another agreement supports “localization efforts associated with multi-mission surface combatants and aerostats.”

Boeing on May 21 said Saudi Arabia intends to buy the P-8, joining the U.S., the UK, India, Norway, Australia and potentially New Zealand, as current or future customers of the 737-800 anti-submarine warfare derivative. Boeing also announced the kingdom’s intent to purchase CH-47 Chinook heavy-lift helicopters—an agreement that follows a Pentagon notification to Congress in December that specified a Saudi request for 48 CH-47F models.

Saudi Rotorcraft Support Company, a joint venture of Boeing, Alsalam Aerospace Industries and Saudia Aerospace Engineering Industries with bases in Riyadh and Jeddah, received a commercial registration certificate. It will perform work on both military and commercial helicopters, Boeing said.

Elements of the arms package, which was described only in broad terms by the contractors and the White House, reinforce or affirm previously announced understandings. In addition to its December announcement regarding CH-47 Chinooks, the Pentagon’s Defense Security Cooperation Agency notified Congress in January of a possible foreign military sale (FMS) of ten Lockheed Martin 74K Persistent Threat Detection System aerostats. An FMS of four Lockheed Martin Multi-Mission Surface Combatant ships and associated equipment and support valued at $11.25 billion was notified in October 2015.

Saudi Arabia is already procuring new and upgraded F-15SA fighters, AH-64D/E Apache attack helicopters, and AH-6 light attack/reconnaissance helicopters from Boeing, as well as UH-60M Black Hawk helicopters from Lockheed Martin and MD530Fs from MD Helicopters under an arms package the U.S. and Saudi governments negotiated in 2010. Boeing delivered the first of 84 new F-15SAs late last year; that portion of the arms package, with 70 upgraded fighters, was valued at $29.4 billion.

Briefing reporters on May 18 at Boeing’s Ridley Park, Pennsylvania, facility near Philadelphia, Mark Ballew, director of global sales and marketing for attack helicopters, reported progress on delivering AH-6s to Saudi Arabia. The first nine of 24 helicopters will be delivered this month; the remaining 15 will be delivered by the end of the year, Ballew said. Boeing assembles the Chinook at Ridley Park; it assembles Apaches and AH-6s in Mesa, Arizona.

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