• Fri. Jul 19th, 2024

US Approves $3.5B Arrow 3 Missile Defense Sale To Germany

Aug 19, 2023

The United States has approved the sale of the Arrow 3 missile defense system to Germany, making it Israel’s largest-ever defense deal. This transaction involves a price tag of $3.5 billion, equivalent to around NIS 14 billion.

What’s Special About Arrow 3?

The Arrow 3 missile defense system represents a collaborative effort between the US Missile Defense Agency and the Israel Missile Defense Organization (known as “Minhelet Homa”), a division of the Defense Research and Development Directorate (“Maf’at”) within the Ministry of Defense. According to the announcement, the Israel Aerospace Industries (IAI) will be the lead contractor.

Renowned as the world’s foremost air defense system, Arrow 3 is strategically designed for the interception of ballistic missiles in space. One unique attribute of Arrow 3 is that it operates on the principle of “hit to kill,” which entails direct physical engagement with the intended target.

As the main contractor, IAI is primarily responsible for the Arrow system’s development and accompanying radar technology. Meanwhile, Elbit Systems will contribute to the project’s command and control system.

Moreover, Rafael Advanced Defense Systems and Tomer are integral sub-contractors responsible for the interceptor missile and its propulsion mechanism. It’s worth noting that IAI’s subsidiary, Stark Aerospace, has an important arms contract deal with the United States.

Hence, authorization from the US government was essential in facilitating a commitment letter signed by defense officials from Israel and Germany. This initial commitment of $600 million will catalyze commencing work on the project without delay.

The specifics of the contract were mutually agreed upon by the German Federal Ministry of Defense and Israel’s Ministry of Defense and subsequently subjected to the approval of the German government and the Bundestag. However, all parties involved in the contract will complete the signing of the agreement by November 2023.

A Boost In Manpower

One of the side benefits of the deal is that it will lead to a considerable expansion of the workforce dedicated to the Arrow 3 project. There is an expectation that the expansion will result in hundreds of new employment opportunities, as indicated by Moshe Fattal, the head of the Israel Missile Defense Organization.

Fattal also revealed plans to manufacture 50% of the components necessary for the project would within the United States. IAI’s CEO, Boaz Levy, underscored the significance of this contract, saying, “There is no doubt that this is a huge contract, and we have to show that we are capable of it.”

He further detailed the immediate steps, encompassing component procurement, followed by the integration process involving both US and Israeli components.

Adding new personnel to the workforce will involve rigorous training akin to the training provided to the current Arrow workforce. As Levy highlighted, the NIS 14 billion contracts received by IAI will be pivotal in fostering further growth.

Earlier this month, the US government approved the sale of David’s Sling system arms deal valued at €316 million to Finland. The development of the weapon was a collaborative effort between Rafael and Raytheon.

This system intercepts ballistic missiles, cruise missiles, aircraft, and drones. Germany, like Finland, is motivated by the need for enhanced air defense capabilities against the Russian threat to its security and that of its neighboring nations.