Lockheed Says Qatar Budget Woes Could Delay Defense Deal
April 26 2016 - 2:05PM
Dow Jones News
By Doug Cameron
The head of Lockheed Martin Corp. said Tuesday that domestic
budget pressures could delay Qatar from signing a multibillion
defense deal this year, though she expressed confidence that the
slide in energy prices wouldn't dent Lockheed's efforts to boost
exports.
The world's largest defense company by revenue has included the
$6 billion sale of two of its Thaad missile-defense systems to
Qatar in a backlog expected to be as high as $95 billion by
year-end, but Chief Executive Marillyn Hewson said the proposed
deal was one of two on an internal watch list.
Oil-rich Middle Eastern nations and Asian states alarmed by
China's military buildup have helped cushion Western arms makers
from domestic military budget cuts, but the slide in energy prices
has led to concerns among investors that deals could stall.
Ms. Hewson had previously expressed confidence that a welter of
security risks would, if anything, boost exports as countries spent
more on munitions and high-end defense systems such as combat jets
and missile defense.
She still expects Qatar to buy the Thaad, which can destroy
ballistic missiles far from their target. Qatar has boosted
military spending almost fourfold in recent years to protect its
huge gas fields and big infrastructure projects such as stadiums
for the football World Cup in 2022.
"It's just a matter of them balancing their budget," said Ms.
Hewson of Qatar's plans, adding that there were no signs of
overseas buyers cutting purchases of "essential" military
equipment.
Lockheed has already sold Thaad to the United Arab Emirates and
Oman. South Korea has also expressed interest in the system, which
is already in use by the U.S. Army. Beyond missile defense, the
company's other big export opportunities include combat jets -- it
has discussed building an assembly line in India -- and Sikorsky
helicopters.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
April 26, 2016 13:50 ET (17:50 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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