Bloomberg July 23, 2002
Boeing, EADS to Work Together on Missile Defense
By Andrea Rothman and Peter Robison
Farnborough, England, July 23 (Bloomberg) -- Boeing Co. reached agreement with European Aeronautic, Defense & Space Co., the largest aerospace company in Europe, to cooperate in developing missile defense programs.
The companies at a joint press conference called the accord a first step toward broader U.S. and European cooperation on missile defense. Boeing, the top contractor for the U.S. program to develop a mainland missile shield, also signed agreements with the U.K.'s BAE Systems Plc and Italy's Finmeccanica SpA's Alenia Spazio unit.
U.S. President George W. Bush has sought in recent months to ease European opposition to missile defense by getting companies there involved in the program. Boeing and EADS said the partnership, which doesn't involve any funding from either side, might lead to contracts and jobs in Europe if it's supported by governments there. That may be unlikely, one analyst said.
``The United States has been trying to get greater European involvement in missile defense for nearly two decades now, and it's pursued both a political track and a contractor track,'' said John Pike, an analyst with the defense research group Globalsecurity.org. ``Neither one of them has provoked much interest when it came down to writing checks.''
U.S. military planners have said allied participation could extend the range of the system and defray its cost, which the Pentagon now estimates at $48 billion through 2007.
Cooperation
Cooperation might allow the U.S. to test and eventually deploy sensors, missile interceptors or radar in areas closer to enemy states such as North Korea, Iran and Libya, Air Force Lieutenant General Ronald Kadish, head of the U.S. Missile Defense Agency, said last month.
``This agreement allows Boeing and EADS to offer significant contributions to current NATO programs and provides an important industrial framework for future defense programs,'' Boeing Chairman Phil Condit said as he announced the agreement at the Farnborough Air Show near London.
European governments haven't offered the companies any funding for the project, said Philippe Couillard, head of the EADS launch vehicles unit.
``No government in Europe promised anything,'' he said. ``We're responding to the initiative of General Kadish, who asked that defense companies in the U.S. and Europe cooperate.''
Lockheed Martin Corp. and Raytheon Co. already work with Israel, Italy, Germany and Japan on a few short-range missile defense programs to protect troops in the field. Broader allied participation and testing of technologies were constrained by the Anti-Ballistic Missile Treaty, abandoned by the Bush administration in June.
`Security Challenges'
``More and more people in Europe are becoming aware of the new security challenges,'' said Rainer Hertrich, co-chief executive of EADS. ``There is a strong basis for the United States and Europe to work together to face a common threat.''
EADS, BAE and Finmeccanica are partners in European missile company MBDA. MBDA said that Boeing isn't working directly with it. Instead, Boeing is speaking individually with each of the three partners.
Lockheed Martin Corp., which is also working on the missile shield, is talking to possible European partners including Russia's Khrunichev State Research and Production Space Center.
``Withdrawal from the treaty system and the direction that Russians have taken in wanting to talk about missile defense is a very positive sign,'' said Vance Coffman, chairman and chief executive of Lockheed Martin, in an interview. ``We carry on those discussions in good faith with a number of countries.''
Reliability
Kadish has said there could be government-to-government arrangements or industry-to-industry agreements. The Pentagon hasn't proven it can repeatedly and reliably intercept incoming enemy missiles protected by decoys during all three stages of flight -- ascent, mid-flight and descent.
Still, the program has been buoyed by two consecutive successful intercept tests of the ground-based system managed by Boeing and two consecutive successful sea-based intercepts of a short-range missile.
Copyright 2002 Bloomberg
