Lockheed Martin (LMT) will get the first payment for its Terminal High Altitude Area Defense system for Saudi Arabia, the Pentagon announced late Monday. The THAAD missile defense system payment comes as Congress has moved to limit arming the kingdom.
XUnder the $945.9 million contract, Lockheed Martin will provide tooling, test equipment, and personnel for the THAAD missile defense system.
The $15 billion deal includes 44 launchers and was part of the $110 billion Boeing (BA), Lockheed and Raytheon (RTN) arms package for Saudi Arabia announced during President Donald Trump's 2017 visit. However, many deals weren't finalized.
General Opposes F-35 Sale To Turkey
Separately, a top U.S. general told the Senate Armed Services Committee that America should not go ahead with selling F-35 fighter jets to Turkey, if the NATO ally goes ahead and accepts Russian S-400 surface-to-air missile defense systems
"My best military advice would be that we don't then follow through with the F-35, flying it or working with allies that are working with Russian systems, particularly air defense systems," said Army Gen. Scaparrotti, head of U.S. European Command.
Lockheed shares rose 0.4% to 305.84 on the stock market today. Boeing stock dipped 0.6%. Raytheon stock fell 0.6%.
U.S.- Saudi Arabia Relations Strained
The U.S. State Department approved the THAAD missile defense sale in October as it "furthers US national security and foreign policy interests."
Riyadh has had a close relationship with Washington but the war in Yemen and the murder of journalist Jamal Khashoggi have strained the alliance.
After a Foreign Relations Committee hearing Monday, Republican senators said they were disappointed with the White House's handling of the Khashoggi murder. On Friday, the Trump Administration missed a deadline to submit a report to Congress on the Saudi Crown Prince Mohammed bin Salman's involvement with the murder.
"The Senate will have to decide whether it's going to impose its own sanctions," Florida GOP Sen. Marco Rubio said.
Congress placed a hold in June on a deal to sell thousands of Raytheon precision-guided munitions to Saudi Arabia over attacks in Yemen that targeted civilians. In November, it voted to end support for the Saudi-led coalition against the Houthi rebels.
Raytheon expects sales to Saudi Arabia to be "flattish" year over year in 2019 as tensions rise with Congress. Raytheon's TPY-2 radar system is on order to be used with the THAAD.
Strong Saudi Case For THAAD Missile Defense System
Ultimately, lawmakers would struggle to upend the U.S.-Saudi alliance without presidential support, says Michael O'Hanlon, a senior fellow at Brookings.
"I do think arms sales are going to be a lot more complicated, but it's hard for Congress to pull the plug on this relationship," O'Hanlon said.
He said that Saudi Arabia's case for the THAAD missile defense system is strong as the kingdom has been hit by ballistic missiles fired by Yemen's Houthis and is wary of Iran's missiles and nuclear program.
"The Middle East is a place where missiles fly," O'Hanlon said.
The U.S. is also concerned about Iran's nuclear program and missile capabilities.
"When it's THAAD they are speaking to an immediate, acute missile threat," O'Hanlon concluded. "I would be surprised if we denied it."
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The post Lockheed Gets First THAAD Missile Defense Payment As Congress Frustrated With Saudi Arabia appeared first on Investor's Business Daily.
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