IAI will team with Lockheed Martin, potentially collaborating on Aegis systems. (IAI)

TEL AVIV: Lockheed Martin and Israel Aerospace Industries (IAI) have entered into a new agreement that will see the world’s largest defense contractor helping to manufacture and sell Israeli-made air defense systems — taking over work previously handled by Boeing.

IAI and Lockheed on Tuesday announced a Memorandum of Understanding (MOU) for collaboration in Integrated Air and Missile Defense (IAMD) systems. Under this collaboration, the companies will explore potential joint opportunities in areas such as research and development, production, marketing and other activities.

Breaking Defense has learned that one immediate effect of the MOU will be the end of a contract between IAI and Boeing that saw the American giant manufacture parts of the IAI Arrow 3 ballistic missiles interceptor. Sources here said that the production of the next batch of Arrow 3 parts will go to Lockheed Martin, to be followed by a contract that will make Lockheed Martin the partner of IAI in the manufacturing of the Arrow-4.

A Boeing spokesperson in Israel declined to comment, but a company source told Breaking Defense that “We are not surprised. This thing has been cooking for some time. It will affect the relations with IAI that have been built through the years.”

The joint efforts will use the systems developed by IAI as the baseline, but additional systems are expected to be developed by the two companies, sources here say. According to those sources, the companies plan to evaluate if the IAI BARAK-8 missile can be used as part of Lockheed’s Aegis weapon system.

Lockheed and IAI will also establish an executive steering committee and working groups for the implementation of this MOU and cooperation. In a statement, Tim Cahill, Lockheed’s senior vice president for global business development, said the company’s “longstanding relationship with the State of Israel and its defense industries opens new opportunities for Lockheed Martin, aimed to expand our businesses around the world while delivering unmatched IAMD capabilities to our global customers. This new Memorandum of Understanding is yet another step in our strategy for cooperation with IAI, as a partner in some of our key programs.”

Boaz Levy, IAI’s President & CEO, added that “The MOU entered today is a strategic agreement for us. Combining the development capabilities and the vast knowhow of Lockheed Martin and IAI experience accumulated over the years in IAMD systems will create win-win opportunities for both sides. IAI looks forward in exploring this cooperation and optimizing the possibilities in it.”

In recent years IAI has invested large budgets in the development of new, very advanced air defense systems. These have been developed based on the operational experiences of the Israeli Air Force, which is in charge of air defense in Israel.

Three months ago, IAI begun the series production of the BARAK ER, the newest member of its air BARAK family of air defense missiles. That system allows an intercept of airborne threats at an extended range of 150 kilometers, as well as ballistic targets. The extended range capability is made possible in part by adjusting the interceptor and MMR radar capabilities to a 150 km range, and can be fitted for land and maritime use.

IAI manufactures all of the system’s elements in-house, including radars, launchers, missiles, and the command and control center. The company says that the extensive firing trials to which the system was subjected under difficult land and sea conditions is the best proof of the system’s capabilities.

The BARAK system is in use by Israel’s Navy and all three branches of India’s military, as well as additional customers.

The agreement with Lockheed comes just months after Israel and the US began development of the Arrow–4 ballistic missile interceptor. The design is aimed at dealing with new threats posed mainly by the Iranian long range ballistic missiles.

Israeli defense minister Benny Gantz said on Feb. 18 that the co-development of Arrow-4 \with the U.S will result in a technological and operational leap forward, preparing for the future battlefield. The development is jointly managed by the Israel Missile Defense Organization (IMDO), in the Directorate of Defense R&D (MAFAT) of the Israel Ministry of Defense, and the U.S. Missile Defense Agency (MDA).

According to the Israeli MOD, the Arrow-4 will be an advanced, innovative interceptor missile with enhanced capabilities. It will address a wide range of evolving threats in the region and will replace the Arrow-2 interceptors over the next decades.