U.S. President Barack Obama’s Phased Adaptive Approach for defending Europe against ballistic missile attacks strengthened Raytheon Missile Systems’ already strong position in the interceptor business.
Raytheon’s Standard Missile (SM)-3 sea-based interceptor, initial variants of which are now operational, is the cornerstone of the strategy. U.S. Navy ships equipped with the SM-3 Block 1A are patrolling the Mediterranean providing an initial defensive capability, and plans call for deploying land-based variants of the interceptor on European soil.
The SM-3 Block 1B upgrade is undergoing testing — it has made two successful intercepts following a failure in late 2011 — while a larger variant, the SM-3 Block 2A, is being co-developed with Japan. Raytheon also builds the Exoatmospheric Kill Vehicle (EKV), the business end of the Ground-based Midcourse Defense system deployed to protect the U.S. homeland against missile strikes.
But Raytheon faces challenges in this business area. A new variant of the EKV, dubbed the EKV Capability Enhancement 2, failed in a December 2010 test and hasn’t flown since; the U.S. Government Accountability Office (GAO) has criticized what it sees as potentially wasteful concurrency in testing and production of the SM-3 Block 1B; and Raytheon faces competition from Lockheed Martin and Boeing to develop an even more capable variant of the SM-3, known as the Block 2B.
Wes Kremer, who runs the missile defense business at Raytheon Missile Systems, addressed these and other issues in an interview with Space News staff writer Titus Ledbetter III.
Production on the EKV Capability Enhancement 2 program was halted in the wake of the December 2010 intercept failure. What is the status of that program?
Until we demonstrate the Capability Enhancement 2 configuration with a successful intercept, we are not planning to restart production. And that is planned to be in the first or second quarter of calendar year 2013.
A nonintercept test intended to validate fixes to the problem that caused the failure has been postponed until late this year. Are you confident that you understand what |happened?
There was a planned flight this spring to validate the fixes, and we do understand the root cause and the required fix. What delayed us was making that fix repeatable and producible. In other words, we could develop hardware that would meet all of the requirements and address the failure but we couldn’t repeatably and predictably do that. Since we are going back into production we took a little extra time to work through the processes and the things required to get to a repeatable design on the hardware so that we can be confident when we then apply the intercept that all of the underlying pieces required for production have been demonstrated.
Can you comment on the GAO report that criticized several missile defense programs, including the SM-3 Block 1B, for development and production concurrency?
I would say we have very little concurrency on the Block 1B. We are not doing any production work yet, right? We need to get through the third flight test — and there are hundreds of ground tests and validation tests that will have happened on the ground; that body of evidence is what will allow us to just start buying long-lead material.
A well-run program in my opinion will always have some concurrency. Can you bound and understand the risk? I think that is where industry is kind of at odds with the GAO. The GAO has taken a very, I would say, idealistic view of concurrency by saying any concurrency is bad. And I would argue that if you follow the GAO model, you would create major disruptions in the supply base right at the production start-up.
Do you have any specific industrial base concerns in the missile defense area at the moment?
I think not only missile defense but all of our defense industry right now is very concerned about sequestration. We are entering into uncharted territory. My personal opinion is that missile defense is pretty high on the priority list and I think that we probably won’t see as great an impact as potentially some of the other impacts. But until it actually happens and we understand how it is implemented, that is purely speculation.
Has Raytheon experienced cost increases on its missile and interceptor programs related to the spike in propulsion prices that followed the retirement of NASA’s space shuttle?
We initially had some increases but the dire projections of these 50, 60 percent increases in propulsion costs have not come true at all. The industry base appears to be stabilizing, and we are able to make up for that in other parts of the missile. So we are not seeing an overall cost increase due to propulsion. If anything, what is making it most challenging for us is the overall decrease in quantity across all of the programs in the portfolio. The U.S. government is buying smaller quantities and we are more sensitive to that than we are to just the propulsion.
How confident are you of winning the SM-3 Block 2B development contract, assuming that program moves forward?
Standard Missile is a franchise program for Raytheon. We pioneered the hit-to-kill technology and certainly the Standard Missile right now is the primary upper-tier ballistic missile defense weapon for regional and theater-based defense. So it is big priority with us. We certainly feel that we have the experience base and the right engineers who understand how to do this mission. It is a pretty small program at this time but in the future it could become something very large.
Do you expect your missile defense business to grow over the next five years?
We talked a little bit about 2B and certainly that is one of those growth opportunities. Certainly getting the 1B through the development phase so that we can get into production represents a growth opportunity in that we may be able to sell that to other countries. And finally, the 2A with Japan is the same thing. It is a co-development project with Japan. Is has been a very well-supported program congressionally. It has even gotten some plus-ups in the past. And we believe once we get that capability deployed, there is an opportunity to sell more of those.
How is Raytheon supporting the Aegis Ashore program for defending Europe?
One of the hallmarks of Aegis Ashore is there are minimal changes to the weapon system. The concept was literally to cut a deckhouse off a ship, put it on shore and connect it up to the vertical launch cells. Obviously, it isn’t physically cutting, but it is that same configuration. The missile is exactly the same. The one thing that is different is the distance between the missile silos and the radar. In the Ashore configuration, it is a much greater distance. It could be a mile or something from where the radar and the operators sit to where the vertical launch cells are with the missiles in them. That has been one of the things that we have to work out and that is part of what we will prove out in the ground site in Hawaii. Construction is starting on that. The way Standard Missile works is the Aegis radar is tracking the target but it also tracks the interceptor missile after launch. If you are launching the missile from a mile away rather than from tens of feet away, then where the radar looks in the sky to acquire the missile right after the launch is different.
Can you discuss the international market potential for the SM-3?
Obviously, our first and foremost partner is Japan. Japan already has the Block 1A missile and they are partners with us on the development of the 2A. We anticipate that they will want to buy some 1B missiles. The other area where there has been a lot of interest is in Europe, especially with Germany, the Netherlands and Denmark. You have countries like Norway and Spain that already have Aegis ships that would just require minor modifications. And then finally there is a great amount of interest in the Middle East in getting an upper-tier missile defense capability.
