Lockheed’s $15-bn Saudi deal at risk after Khashoggi death
Lockheed Martin’s potential $15 billion sale to Saudi Arabia of its Thaad air-defense system may be the unfinished deal most vulnerable to growing congressional demands to stop providing arms to the desert kingdom after the killing of critic Jamal Khashoggi. It also underscores that the $110 billion package of arms sales that President Donald Trump announced on his visit to the Gulf nation last year — and has vowed to protect despite Khashoggi’s death — was always aspirational at best.
“That number is not analytically helpful, that number is politically helpful,” said Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies in Washington. “It’s not close to $110 billion in hardware, and it doesn’t go this year or next year.”
The pending Saudi deals for arms, logistics and training includes sales started during President Barack Obama’s administration. Only $14.5 billion of that involves signed “letters of offer and acceptance” that spell out final terms and prices, according to the Pentagon. The sale of Lockheed’s Terminal High-Altitude Area Defense system remains under negotiation a year after it was initially approved by Congress.
US officials and congressional aides said that although Congress approved the potential Thaad sale early last November, the letter of offer and acceptance agreed to in February hasn’t yet been signed and remains under negotiations.
Largest Order
Bruce Tanner, chief financial officer for Lockheed, the biggest US defense contractor, told analysts on the company’s quarterly earnings call Tuesday that the Thaad deal with the Saudis is “the largest order we’ve been waiting on” that “has not taken place yet.” He said the Bethesda, Maryland-based company is “not sure when that will take place.”
In any case, Tanner said, “we would not have significant sales in the near-term” in part because he understood the Thaad system for Saudi Arabia wouldn’t possess an initial combat capability until 2023.