From 600 to 2,000 per year: US strikes $58.8 billion deal with Lockheed to triple Patriot missile production

The US Pentagon has struck a deal worth up to $58.6 billion with Lockheed Martin Corp to triple the production of Patriot interceptor missiles over the next seven years. The move is believed to have been triggered by an air defence system shortage caused by escalating wars and recent global conflicts.The Patriot missile is part of a mobile, ground-based air-defence system that protects military bases, cities and critical infrastructure from ballistic missiles, cruise missiles, aircraft and drones. (Reuters)Expensive to produce and hard to replace, the Patriot Advanced Capability-3 Missile Segment Enhancement is one of the world's most advanced air-defence systems that protects military bases, cities, and critical infrastructure from ballistic missiles, cruise missiles, aircraft and drones.A multi-year deal to boost productionThis fresh deal directly extends a $4.7 billion contract received by Lockheed, a Maryland-based defence contractor, to boost production of one of the most advanced Patriot interceptors. Currently, 600 Patriot missiles are produced by the country each year at a cost of about $4 million each, according to Bloomberg.The new year seven-year draft agreement, however, creates a multiyear procurement plan for the interceptors from fiscal year 2026 to 2032. This shifts away from the current model of having annual deals, although the new deal remains vulnerable to shifting budget alignments as congressional approval comes through on a yearly basis.Under the fresh deal, missile production will be expanded from 600 units to 2,000 units a year by 2030.The funding from this deal will allow Lockheed to not only triple PAC-3 MSE production capacity by the end of 2030 but also boost jobs at its Camden, Arkansas, plant by 50%, to about 1,850 from 1,200. $8 billion to $9 billion will be invested by the company through 2030 to modernise more than 20 US facilities, including new munitions centers in Alabama and Arkansas, as per Reuters.Exact terms and delivery dates for many Pentagon munitions deals, however, are still under negotiation. Meanwhile, a similar deal has been struck with Raytheon's parent company RTX to boost production of Tomahawk cruise missiles from the current rate of about 60 per year for the U.S. to eventually 1,000 units annually.What drove this deal?As per the Center for Strategic and International Studies, a Washington-based think tank, the recent surge in global conflicts ranging from US aid to Ukraine in its war against Russia and the country's own ongoing conflict against Iran has severely depleted the country's air defence munition stockpile.As per the Center's estimates, the US military is left with less than 1,000 Patriot interceptors as of this week and fewer than 250 THAAD interceptors - two key air defence systems. Both have seen recent heavy usage in the West Asia conflict.Following a recent pause in missile attacks by the US, airstrikes have now resumed on both ends as the West Asia conflict continues in the lack of a substantial peace deal.