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Missile defense shift has winners and losers

Obama's decision to halt a proposed ground-based system in Europe will hurt Boeing, but Raytheon and Lockheed Martin stand to benefit because they make and control ship-based weapons.

September 23, 2009|Mike Musgrove

WASHINGTON — President Obama's decision last week to scrap a proposed ground-based missile defense system in Europe was bad news for Boeing Co. and other contractors associated with the plan, but it could be a boon for Raytheon Co. and other companies that produce ship-based systems, analysts said.

Boeing had been slated to manage the construction and installation of 10 ground-based interceptors in Poland that were part of the Bush administration's original plans.

"The losers are clear," said Phil Finnegan of research firm Teal Group. "Boeing was going to develop that site, and obviously that's not going to happen."

The announcement also came as bad news, he said, for Orbital Sciences Corp. of Dulles, Va., which was going to supply 10 interceptors for the missile shield. During the Bush administration, the U.S. military designed its defense plans with the expectation that Iran would soon develop long-range missile capabilities, defense industry consultant Loren Thompson said. That didn't happen, he said.

Raytheon of Waltham, Mass., and Lockheed Martin Corp. of Bethesda, Md., stand to benefit from what will probably be an increase in U.S. government contracts, analysts said. Raytheon makes the ship-based missiles, and Lockheed makes their control system.

John Pike, director of, a defense industry research firm, said that under the Obama administration's proposed approach of using ship-based missiles to protect against threats from Iran, "you're going to need all these missiles that Raytheon makes, zillions of them."


Musgrove writes for the Washington Post.

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