Increased support for Israel opens more doors for Raytheon

2014-07-27T00:00:00Z 2014-07-29T09:24:23Z Increased support for Israel opens more doors for RaytheonBy David Wichner Arizona Daily Star Arizona Daily Star

As Hamas rockets continue to rain down on Israel from Gaza and the key U.S. ally strikes back, Congress is rushing to add hundreds of millions of dollars in funding to support Israeli missile defense.

And that could give Tucson-based Raytheon Missile Systems — a key contractor in U.S. missile defense and already a partner on some Israeli missile-defense projects — a bigger role in the region and welcome new business.

The U.S. reached an agreement with Israel in March that calls for U.S. co-production of interceptor components for the Iron Dome system, which has been credited with intercepting hundreds of Hamas rockets since early July.

The Iron Dome system was developed and is made by Israel’s state-owned Rafael Advanced Defense Systems, which in 2011 signed an agreement with Raytheon to co-market the system worldwide.

A formal co-production agreement from Israel’s Ministry of Defense is expected soon.

The U.S. Missile Defense Agency, which manages joint missile-defense programs with allied nations, expects the first contracts will be awarded later this year. The agency expects that a significant portion of the funding will be allocated to U.S.-based production contracts, Missile Defense Agency spokesman Richard Lehner said.

Raytheon referred all questions about Iron Dome to Rafael, which didn’t respond to a request for comment. The Israeli Ministry of Defense has declined to comment on the matter.

But even as the agreement on co-production is being finalized, Congress is poised to pour hundreds of millions of U.S. taxpayer dollars into the program.

A defense-spending bill passed by the House in June and a similar measure awaiting floor action in the Senate roughly doubles to $351 million Iron Dome funding the Pentagon had requested for fiscal 2015.

And just last week, congressional budgeters proposed an emergency appropriation — sought by the Pentagon at Israel’s request — of $225 million to help Israel buy more interceptors for its Iron Dome anti-rocket system, which Israel credits with intercepting most of the rockets it has targeted.

CO-PRODUCTION IN U.S.

Separately, Congress has OK’d some $97 million the Pentagon wants in fiscal 2015 for two missile-defense co-development programs with Israel — the David’s Sling system being co-developed by Raytheon and Israel’s Rafael, and the longer-range Arrow system, which is co-produced by Israel Aerospace Indus tries and U.S. defense contractor Boeing Co.

But the Iron Dome money comes with some strings attached. Unlike the Arrow and David’s Sling systems, the Iron Dome has been developed and produced primarily in Israel.

Now, Congress wants as much as half of the spending to be in the U.S., according to a Missile Defense Agency report to Congress obtained by Bloomberg News.

The report says funds going to U.S. contractors for Iron Dome components would jump to 30 percent this year and 55 percent next year from 3 percent previously, Bloomberg reported.

The U.S. partnership on Iron Dome is seen as a positive development in Israel, said Avi Schnurr, executive director of the Israel Missile Defense Association.

Iron Dome has changed the dynamics of missile defense in Israel, Schnurr said.

He noted that as in past Gaza rocket-attack campaigns, attack-alert sirens still wail nearly daily in Israeli cities and people still rush for shelter. But now, they see the Iron Dome interceptors in action and emerge to find far fewer casualties and far less property damage than Gaza rocket-attack campaigns in 2006 and even 2012.

“It has been a transformational experience, and I suspect countries worldwide will be looking at the implications of having this tool,” Schnurr said in a phone interview from Israel.

Professor skeptical

Amid the push to boost U.S. funding and development of Iron Dome, some critics have questioned the system’s effectiveness.

Theodore Postol, a professor at the Massachusetts Institute of Technology and a longtime critic of missile-defense systems, recently wrote a report suggesting Iron Dome is far less effective at intercepting rockets than the success rate of some 90 percent touted by the Israel Defense Forces.

Based on his analysis of video of Iron Dome launches, Postol asserted that the system’s Tamir interceptors — designed to detonate near an incoming rocket and destroy it with a hail of metal rods — are likely effective only about 5 percent of the time, often bringing down rockets but usually failing to detonate their warheads.

Postol has been right before. His analysis of the effectiveness of the Patriot missile system at knocking down Scud missiles during the first Gulf War prompted the Pentagon and the administration to back off claims that the system was up to 80 to 90 percent effective.

In his Iron Dome analysis, Postol attributed the lower casualty and damage rate compared to earlier rocket-attack campaigns to improved Israeli alert and sheltering systems and the relatively small warheads of the unguided Hamas rockets.

But his analysis has been dismissed by Iron Dome supporters who say Postal lacks the data to make his conclusions and that the relatively low number of civilian casualties and property damage proves Iron Dome is significantly effective.

Where’s the damage?

John Pike, a longtime military and space analyst who heads Globalsecurity.org, says he has a lot of respect for Postol, citing his work on the Patriot studies.

But Pike said Postol’s analysis is based on assumptions about the Iron Dome warhead design that may or may not be accurate, and the absence of major property damage alone suggests Iron Dome has had a significant effect.

“Where’s the property damage?” Pike said. “If the casualty reduction is due to warning and sheltering, there should still be extensive property damage and there isn’t.”

Some data not provided

Pike noted that during the Lebanon War in 2006, Hezbollah fired twice the number of rockets at Israel that Hamas has fired so far in the current conflict, killing about 40 Israeli civilians and damaging thousands of buildings.

In contrast, the Israeli government as of last week said three Israeli civilians had been killed in the rocket attacks since early July, and a former Israeli missile-defense commander recently wrote in The Jerusalem Post that property-damage claims from the current conflict comprise a relative fraction of similar conflicts in 2006 and 2012.

Schnurr, the head of the Israeli missile-defense advocacy group, said Postol’s report isn’t based on real-world data and ignores the reality on the ground in Israel.

“These are people who have no data whatsoever,” said Schnurr, adding that members of his group with close ties to Israel’s Ministry of Defense have confirmed the accuracy of the estimates.

Schnurr also doubts there’s been any attempt to hide casualties or damage.

“Israel is an open democracy,” he said. “If there were some attempt to hide data, it would be exposed very quickly.”

But Iron Dome information publicly released by the Israel Defense Forces lacks some critical data on rocket kills.

The IDF regularly publishes updates on rockets fired from Gaza, the number that hit Israeli territory and the number intercepted by Iron Dome. But the system isn’t used against rockets that are headed for unpopulated areas, and the IDF doesn’t announce the number of rockets targeted by Iron Dome’s Tamir interceptors, or the system’s success rate against targeted rockets.

Since the beginning of major counter-Hamas operations in early July, the IDF says that more than 2,100 rockets have been fired from Gaza at Israel, nearly 1,600 hit Israeli soil and 435 were intercepted by Iron Dome.

GROWING global SALES

Meanwhile, Raytheon continues to work with Rafael on the Stunner interceptor missile it makes for the David’s Sling system, also known as Magic Wand.

That system, which is planned for initial deployment this year, is designed to destroy short-range ballistic missiles, large-caliber rockets, cruise missiles and unmanned aircraft — bridging the gap between Iron Dome and the longer-range Arrow anti-ballistic missile system.

In November, the David’s Sling system posted its successful second test intercept of a missile in southern Israel.

Raytheon, a major supplier of missiles, radars and networks for the U.S. missile-defense programs, has collaborated with several other countries, including Japan on its ship-based Standard Missile-3 ballistic missile interceptor, and with Norway on a medium-range air-defense system.

Sales from international programs including the Israeli missile-defense systems are a growing and important part of Raytheon’s business, especially amid a slowdown in U.S. defense spending.

During a conference call on second-quarter earnings on Thursday, Raytheon Co. executives said 29 percent of the company’s quarterly sales were to foreign customers, and international sales could reach 40 percent of the company’s total in the long term.

Contact Assistant Business Editor David Wichner at dwichner@tucson.com or 573-4181.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Most Popular

Featured businesses

View more...

Deals, offers & events

View more...

Lemonade Days of Summer Smoothies!

Flavors: The Pucker, The Squeeze, and The Crunch - for a limit…