missile move

Report: Germany Ditches Patriot

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Testing the missile system.
  • Why it matters

    Why it matters

    Germany’s order for the Medium Extended Air Defense System would be a blow to Patriot-maker Raytheon and could reshuffle trans-Atlantic defense contracts.

  • Facts

    Facts

    • Germany, Italy and the United States spent billions developing the Medium Extended Air Defense System but the United States withdrew due to budget concerns.
    • Germany’s order for MEADS missiles is worth €4 billion, or $4.5 billion, German broadcaster ARD reported.
    • MEADS are made by Lockheed Martin and a European group controlled by Finmeccanica from Italy, Airbus Group and BAE Systems from the United Kingdom.
  • Audio

    Audio

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The highest ranking officer in the German army, chief of staff Volker Wieker, has decided to buy a new air defense system, the Medium Extended Air Defense System, or MEADS, German state broadcaster ARD reported on Monday.

The new system would replace Germany’s contingent of Patriot missiles, which are produced by U.S. defense firm Raytheon, based in Waltham, Massachusetts.

Germany will reportedly spend €4 billion, or $4.5 billion, on the new missile system, in addition to having invested €1 billion in development costs. The system is made by European defense group MBDA and Lockheed Martin, based in Bethesda, Maryland, the broadcaster said.

ARD cited unnamed sources from the Defense Ministry familiar with the matter and politicians from Germany’s ruling coalition of Christian Democrats and Social Democrats, Florian Hahn and Rainer Arnold.

“More up-to-date, less costs and key German technologies: these are good arguments to me.”

Florian Hahn, Christian Democrat politician

“A selection decision has been made, that is correct,” Mr. Hahn, who is a member of Chancellor Angela Merkel’s Christian Democrat sister party, the CSU, told Deutschlandfunk, a state-backed radio broadcaster and partner of ARD.

“The chief of staff has said we need to close the skills gaps in our tactical air defense system. We want to do this with MEADS,” said Mr. Hahn, who is also a representative in Germany’s federal parliament and a specialist in foreign affairs and security policies.

MBDA is controlled by three European aeronautical and defense companies, the French and German-led Airbus Group, London-based BAE Systems and Finmeccanica of Italy.

The choice of MEADS is a blow to U.S. Patriot developer Raytheon, which competed hard to win the new German defense order. The decision by Germany’s military may lead to purchases by other European countries that currently have the Patriot system, such as the Netherlands.

Poland, a neighbor to Germany, recently decided to buy a newer version of the Patriot system from Raytheon, rather than MEADS missiles.

Germany’s military has chosen MEADS because the system uses a new software program that is owned by the army, broadcaster ARD reported, citing German Defense Ministry sources.

“More up-to-date, less costs and key German technologies: these are good arguments to me,” Mr. Hahn said.

The German Defense Ministry declined to comment on the report. Spokesman Markus Thull told Handelsblatt Global Edition that the ministry planned to decide on a new missile system by the end of this month.

The MEADS system started as a project by the United States, Germany and Italy, but the U.S. government decided in 2012 to withdraw from the project due to budget cuts, according to a Reuters report.

 

Gilbert Kreijger covers companies and markets for Handelsblatt Global Edition. To contact the author: kreijger@handelsblatt.com

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