Lockheed Martin and Boeing have emerged as the big winners from U.S. President Donald Trump’s visit to Saudi Arabia, during which the U.S. inked approximately $110 billion in arms deals.
After decades of procuring directly from the U.S., the nation of approximately 33 million people now wants local jobs and skills to come with its mega-purchases. Riyadh intends to spend more than $350 billion on U.S. technologies and programs over the next decade.
Lockheed says Saudi Arabia intends to spend $28 billion on its products, including integrated air and missile defense systems, aerostats, multi-mission surface combatant ships, radars, surveillance systems, tactical aircraft and helicopters. The deals are subject to various letters of offer and acceptance and a memorandum of intent signed between U.S. and Saudi Arabia during Trump’s visit on May 20.
Lockheed and Saudi Technology Development and Investment Company (Taqnia) have agreed to form a joint venture to build 150 Sikorsky S-70 Black Hawk helicopters locally for the Saudi government. Riyadh also has expressed interest in Lockheed’s Terminal High Altitude Area Defense (Thaad) anti-ballistic missile system, which comes with Raytheon’s 621-mi. (1,000 km)-range TPY-2 transportable surveillance radar.
Lockheed says workshare for the Black Hawk will be split evenly, supporting 450 jobs in Connecticut and across the U.S. supply chain and another 450 in Saudi Arabia. Meanwhile, Lockheed has inked memorandums of understanding with local industrial partners for the development and production of aerostats and a new multi-mission surface combatant for the Royal Saudi Navy, likely based on Lockheed’s Freedom-class Littoral Combat Ship/Frigate.
Lockheed CEO Marillyn Hewson says the deals “strengthen the cause of peace in the region, and provide the foundation for job creation and economic prosperity in the U.S. and in the Kingdom.”
The company did not explain what it meant by “tactical aircraft.” This could be a reference to the Lockheed F-16V “Viper,” which has been heavily marketed across the Middle East. Saudi Arabia hasn’t been permitted to the buy the F-35 Lightning II because of security concerns with Israel, which operates the F-35A. The Royal Saudi Air Force recently began inducting its F-15SA Eagles, built by Boeing in December, complementing its Eurofighter Typhoons.
Boeing also benefited from Trump’s Saudi visit, announcing agreements to buy tandem-rotor CH-47 Chinook cargo/utility helicopters as well as various guided weapon systems.
Boeing says the Kingdom has also formalized its intent to buy the 737-based P-8 Poseidon armed maritime patrol aircraft, in another major victory for the Seattle-built platform. Norway and New Zealand have also moved forward with plans to buy Poseidon.
On the commercial side, Boeing and SaudiGulf Airlines will begin negotiations for the sale of “up to 16” widebody aircraft. The widebody models were not disclosed.
Boeing’s biggest local contribution in terms of workshare appears to be in services area. The company received a commercial registration certificate for the Saudi Rotorcraft Support Company, a joint venture between Boeing, Alsalam Aerospace Industries and Saudia Aerospace Engineering Industries. The company will provide sustainment and support services for military and commercial helicopters, Boeing says.
“Our decades-long partnership with the Kingdom began in 1945 when President Roosevelt presented a [Douglas] DC-3 to King Abdul Aziz Al Saud, launching commercial air travel in the region,” Boeing CEO Dennis Muilenburg says. “We welcome the opportunity to continue that support.”
The Lockheed and Boeing arms deals were among dozens signed during a ceremony involving Trump, U.S. State Secretary Rex Tillerson, Saudi Arabia’s King Salman bin Abdul-Aziz Al Saud, Crown Prince Mohammed bin Naif Al Saud and Deputy Crown Prince Mohammad bin Salman Al Saud.
Hewson and Muilenburg have both had several one-on-one meetings with Trump since his inauguration in January. They have had to respond publicly and privately to Trump’s disparaging comments on social media about the “overpriced” Lockheed F-35 and Boeing 747-8 Air Force One programs. Both are set to benefit from Trump’s expected ramp-up in Pentagon spending, particularly greater orders for the F-35 and F/A-18 Super Hornet.