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Northrop Grumman stalks Israeli missile defense market
[October 03, 2006]

Northrop Grumman stalks Israeli missile defense market

(Israel Business Arena Via Thomson Dialog NewsEdge) The battle in Israel for financial sources to develop defense systems against short and medium-range missile is heating up. The marketing potential for these systems is expected to easily expand beyond Israel's borders.

US aerospace giant Northrop Grumman Corp. (NYSE:NOC) is entering this arena. As a result of mergers and acquisitions, the company now owns the Skyguard tactical high energy laser (THEL) program, a follow-on program of the Nautilus anti short-range missile system.

Rafael Armament Development Authority Ltd. was a partner in the development of the Nautilus. The program was largely shelved in recent years because of a lack of funding, and Israeli reservations about the system. However, the second Lebanon war has changed the picture, and Northrop Grumman's management has spotted the potential.

An Israeli source said, They smell blood. They've launched a struggle, and we should learn from them how to wage a marketing campaign. They're flooding Israel with delegations of managers and technicians. They have direct access to Prime Minister Ehud Olmert and Minister of Defense Amir Peretz through associates, as well as to other top defense officials. Northrop Grumman's people claim that they can fix the flaws in the laser mechanism, the system's Achilles' Heel, but, so far as I know, no one in Israel has received a full briefing on the subject.

Defense News reports that Ministry of Defense officials and defense industry managers anticipate accelerated financing for the simultaneous development of two anti-missile programs. One program is the Kela David (David's Sling) joint venture of Rafael and Raytheon (NYSE:RTN) to develop a response against missiles with a range of 40-250 km. The system is designed to intercept Syrian-made 220mm and 302mm Katyushas and Iranian-made Zilzal missiles.

The US House of Representatives approved $20.4 million for this program in the fiscal year 2007 defense appropriations bill. The US 2007 fiscal year began on October 1. Israel's contribution to the program is not yet known. Another program is the short range ballistic missile defense (SRBMD) program. Ministry of Defense anti-ballistic missile Homa project head Arie Herzog told Defense News that David's Sling program would be ready for operational testing within two years. He believes that the system will be ready for operation two years later, depending on the amount of financing.

The second program is designed to defend against very short range missiles of 3-10 km range, such as the kassam. The Ministry of Defense is considering a number of solutions. One is an interceptor with a kinetic warhead, under development in Israel, and another is Northrop Grumman's Skyguard. In response to a question whether the two programs could be merged, Herzog said the first program was designed for area defense, while Skyguard was a tactical defense system.

Published by Globes [online], Israel business news - - on October 3, 2006

Copyright of Globes Publisher Itonut (1983) Ltd. 2006

Copyright 2006 Globes. Source : Financial Times Information Limited.

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