Lockheed sees growing interest in Patriot missile

By Jim Wolf

WASHINGTON, Aug 23 (Reuters) - Taiwan, Israel, Spain, Greece, Germany and Saudi Arabia are discussing upgrading their U.S.-supplied Patriot air and missile defenses with improved multimillion-dollar missiles to counter perceived threats, Lockheed Martin Corp (LMT.N) said on Thursday.

The other two Patriot-fielding countries, Japan and the Netherlands, already have begun buying Lockheed's updated Patriot Advanced Capability (PAC-3) missile.

"All of those countries have been in discussions with both (the) U.S. government and with Lockheed Martin about paths forward to upgrade to this technology," Dennis Cavin, a vice president at Lockheed's Missiles and Fire Control business unit, told reporters at a company briefing on missile defense.

Lockheed, the Pentagon's No. 1 supplier by sales, is also in talks with another, unspecified, European country about a possible Patriot sale, Cavin said.

New sales of the PAC-3 missile could be worth hundreds of millions of dollars to Lockheed.

Lockheed said on March 19 it received a $376 million U.S. Army contact for production of 112 PAC-3 missiles, launcher modification kits, spares and other equipment.

The PAC-3 missile alone costs about $3 million, said Daniel O'Boyle, spokesman for the army's Patriot project office.

Raytheon Co. (RTN.N) is the system integrator and builds its ground-based radar.

The PAC-3 missile is designed to destroy a target by slamming into it, a technology known as "hit-to-kill."

"You just go look at what our adversaries are talking about," Cavin said. "You have to go to hit-to-kill technology" to defeat such threats as chemical and biological warheads.

FEATURES OF PATRIOT

Patriot defends against enemy aircraft, tactical ballistic missiles and cruise missiles. The PAC-3 missile boosts firepower since 16 of them may be loaded on a Patriot launcher, compared with four, older-generation PAC-2 missiles.

Raytheon predicted in January a spike in Patriot sales amid concerns over the growing might of Iran and North Korea, branded by President Bush as part of an "Axis of Evil" with pre-war Iraq.

"We are working with Taiwan and Saudi Arabia, and talking to Israel and Kuwait, about Patriot system upgrades," Joseph Garrett, a vice president of Raytheon's Integrated Defense Systems business unit, told Reuters.

In comments relayed by a spokesman, he said Japan's upgrade was about half complete, and Raytheon was dealing with South Korea and and Turkey on possible future Patriot programs.