US Defense Firms Eye Expansion Into Saudi Arabia

While the world has watched Crown Prince Mohammed bin Salman’s visit to the U.S., defense companies have their sights set on Saudi Arabia.

As the contracts start rolling in for the weapons agreed to as part of the $110 billion arms pact announced by the Trump administration last May, defense companies are seeking to deepen ties with the kingdom through joint ventures and coproduction arrangements. The crown prince’s strategic plan for the country, Saudi Vision 2030, calls for localizing “50 percent of military equipment spending” by the end of the next decade.

This week, a Lockheed Martin executive said the American firm is “very much committed” to “taking our partnership with the Saudis to the next level,” which includes helping the kingdom grow its industrial base.

Of that $110 billion in arms agreed to last year, Lockheed Martin-made weapons — including warships, missile defense, tactical aircraft and helicopters — make up more than $28 billion. Company officials said the firm plans to receive and fulfill those orders over the next decade.

“One of the most important examples of this potential is our central role in the security cooperation agreements signed between the United States and the Kingdom of Saudi Arabia last May,” Marillyn Hewson, Lockheed’s chairman, CEO, and president said on March 5.

The prince — MBS for short — is slated to visit Lockheed’s satellite production facility in Silicon Valley this week. He will see “cutting-edge space technologies that we’re developing for the Middle East,” as well as parts of the THAAD missile interceptor system being bought by the Saudi military, said the anonymous Lockheed executive, who asked for anonymity because the visit has not been formally announced.

Our “objective is to demonstrate how Lockheed Martin is providing diverse technology solutions, training and educational expertise for the kingdom’s growing aerospace and defense industry,” the executive said.

In Sunnyvale, California, MBS will also see two satellites that are undergoing testing in advance of a scheduled launch later this year.

“They are the largest, most powerful and most advanced commercial communications satellites that we’ve ever built,” the Lockheed executive said. “These satellites will provide high-capacity telecommunications capabilities, including television, Internet, telephone and secure military communications to customers in the Middle East, Africa and Europe.”

The executive “wouldn’t necessarily rule out the possibility of supporting satellite assembly activities in the kingdom” at some point.

Last month, Lockheed received a $481 million contract to start work on four warships for the Saudi navy. The U.S. government originally approved the deal in 2015, but it had been largely stalled until last year.

“We’re continuing to see…real, meaningful progress behind a number of different elements related to the memorandum of intent that was [agreed to] last year,” the Lockheed executive said.

Last week, MBS toured Boeing’s jetliner plant outside Seattle, where he signed an agreement to “develop a new joint venture aiming to localize” more than 55 percent of the maintenance, repair, and overhaul services for military aircraft in Saudi Arabia.

“The agreement will also transfer technology to install weaponry on these aircraft as well as localize the supply chain for spare parts in the kingdom.” Boeing said in a statement.

Raytheon announced last year that it would stand up a Saudi-based division to oversee its weapon programs for the kingdom and the creation of indigenous jobs there.