Lockheed cites foreign interest in MEADS system

> * Three current countries have approved revamped plan * Fewer flights test possible now WASHINGTON, March 28 (Reuters) - The international consortium developing the $3.4 billion MEADS air and missile defense program for the United States, Germany and Italy says it could sign on a fourth foreign partner by next year, according to a senior executive with the group. The United States last month said it would stop funding the U.S.-European Medium Extended Air Defense System, or MEADS, after fiscal year 2013, calling it unaffordable in the current budget climate. Germany issued a similar statement. But Marty Coyne, director of business development for MEADS, said he remained convinced that the system offered unique capabilities to defend against a growing threat, and said he had personally met with officials from several other countries in Europe and the Middle East that wanted to participate. He declined to give any details, but said the MEADS system, being developed by Lockheed Martin Corp (LMT.N) and other companies, had aced a critical design review last August and still offered capabilities that were needed around the world.

"The United States last month said it would stop funding the U.S.-European Medium Extended Air Defense System, or MEADS, after fiscal year 2013, calling it unaffordable in the current budget climate""In the Middle East, there are countries that are absolutely in harm's way," Coyne told Reuters on Monday. "They understand the threat posed by Iran." Israel has developed its own Arrow missile defense system, but that is geared to address long-range ballistic missiles, not the shorter and medium range threats that are the focus of MEADS. Coyne said all three partner countries had approved a revamped plan for the program hammered out after the Pentagon decision, which removed nearly $1 billion in funding for coming years that had been added during a 2008 restructuring. The change means the program will not be able to carry out the seven flight tests that were planned, but it will still move forward this year with another test that does not involve intercepting an enemy missile, followed by actual intercept tests in 2012 and 2013, he said. MEADS officials say the system can defend up to eight times the area of current systems with fewer system elements for less money than it would cost to upgrade existing systems.

Unlike other systems, it also offers 360-degree protection. Coyne said the MEADS team was even more determined now to get through flight tests and prove the capability of the system, and the additional possible foreign partners were watching closely. He said Lockheed and the consortium remained convinced that the United States would continue the program in the end. In an information paper released last month, the Pentagon said the MEADS program had shown marked improvement in recent years after a rough start, but it could not justify spending up to $1.6 billion on the program from 2012 to 2017. Washington said it would still continue the program's development up to a cost ceiling of $4 billion to ensure development of a meaningful capability for Germany and Italy, and maintain a future option for the United States.

(Reporting by Andrea Shalal-Esa; Editing by Steve Orlofsky) Stocks Global Markets Industrials Tweet this Share this Link this Digg this Email Reprints