The Strategist

North Korea-US tension brings profit for American defense companies

10/05/2017 - 11:51

The committees of the US Congress on Defense approved allocation of more than $ 400 million to strengthen the country's anti-missile defense in connection with the increased threat from North Korea. Among the companies that will receive part of these funds are Boeing, Raytheon, Orbital ATK.

Speaking in the Senate yesterday at a hearing on Afghanistan, US Defense Secretary Jim Mattis said that defense committees have approved allocation of $ 416 million for the expansion of production of ground-based interceptor missiles, radar equipment, and the modernization of warships in view of the increased threat of a nuclear attack from the North Korea. As the minister noted, he sent a request and received permission to withdraw these funds from other defense programs, such as military operations of the US Army and technical support. $ 440 million allocated for the fiscal year 2017 remained unused so far.

According to Bloomberg, who managed to get acquainted with the text of the request of the US Secretary of Defense, he justifies the need to allocate an additional $ 16 million to extend the service life of the AN/FPS-108 radar Cobra Dane in the Aleutian Islands, which is serviced by Raytheon and covers the territory of North Korea. Besides, Raytheon can get additional $ 13 million to speed up the modernization of four warships, from which SM-3 Block IIA interceptors will be launched to intercept medium-range ballistic missiles.

Orbital ATK company, which produces missile accelerators for contact warheads Raytheon, will also receive funds from an additional funding package, according to Bloomberg. Boeing purchased 44 land-based missiles from Orbital ATK. According to the minister's request, $ 47 million will be allocated for the construction of 10 new launchers in Alaska, where 32 missiles are already installed. Another $ 8 million will go to increase the number of interceptor missiles from 44 to 64 (previously, $ 219 million was already allocated for these purposes within the budget for 2017). The Minister's application also implies sending $ 15 million to modernize the software of the sea-based X-band radar developed with participation of Boeing. Now that all these decisions on redirecting the funds are coming into force, they should be approved by the committees on the Armed Forces of the US Senate and the House representatives.