Lockheed Martin's Contribution to Saudi Vision 2030

As a part of the efforts to develop a strong arms industry to reduce the country's dependence on oil, Saudi Arabia signed two new contracts with Lockheed Martin to locally produce Paveway II Plus Laser Guided Bombs and Blackhawk helicopters

Lockheed Martin's Contribution to Saudi Vision 2030

A Sikorsky BLACK HAWK helicopter operated by Saudi Arabia’s Ministry of Defense (Photo: Lockheed Martin)

Last year, Saudi Crown Prince Mohammed bin Salman announced his vision for a 2030 reform scheme to increase the country's income to prepare for a possible future with lower oil-driven revenues.

Saudi Arabia is developing a strong arms industry as a part of the new strategy. The kingdom believes that it will lead the military industries sector to increase local content, increase exports and bring foreign investment to the kingdom by entering into joint ventures with major international military industry companies. "The Saudi Arabian Military Industries aims to become one of the world's top 25 defense companies by 2030," according to a statement by the Saudi Public Investment Fund. 

As a part of the implementation of the new strategy, Saudi Arabia signed two new contracts with Lockheed Martin to locally produce the Paveway II Plus LGB and Blackhawk helicopters.

The Paveway II Plus LGB

Saudi Specialized Products Company (Wahaj) signed a teaming agreement with Lockheed Martin in Riyadh on March 1, 2018, to develop the company’s in-country production capability to co-manufacture Paveway II Plus Laser Guided Bombs (LGBs) in Saudi Arabia. The agreement was signed at the Armed Forces Exhibition for Diversity of Requirements and Capabilities annual conference. Chairman of Wahaj Abdulrahman al-Saif affirmed that the agreement would consolidate the country’s domestic defense industry.

Paveway II Plus LGB from Lockheed Martin integrates an advanced guidance system to convert conventional gravity bombs into precision-guided munitions and includes an enhanced guidance package that improves accuracy over legacy LGBs. Paveway II Plus LGBs are cleared for use on US Air Force, US Navy and international aircraft authorized to carry and release LGBs such as the Kingdom of Saudi Arabia’s F-15s, F-16s and the Tornado.

Alan Chinoda, Chief Executive of Lockheed Martin Saudi Arabia, said that the company’s solutions would contribute to fostering Saudi security and providing a solid ground to create job opportunities and achieve economic prosperity. He noted that Lockheed Martin seeks a deal to establish a joint project to produce Black Hawk helicopters in the kingdom.

The Blackhawk Helicopters

A joint venture being pursued between the Kingdom’s defense industry and the American Lockheed Martin to build 150 Blackhawk helicopters with local employees. The agreement to establish a joint venture – known as Rotary Aircraft Manufacturing Saudi Arabia (RAMSA) – was signed as part of the big package of defense industry deals announced during US President Donald Trump’s visit to the Kingdom in May 2017.

Chinoda revealed the job creation package in an interview with Arab News ahead of the Armed Forces Exhibition for Diversity of Requirements and Capabilities (AFED), which opened in Riyadh on February 26, 2018. "We’ve created a joint venture to produce 150 Blackhawks in the Kingdom, which is a tremendous opportunity. It will create a whole new technology eco-system and will involve the transfer of technology as well as jobs. The project will create as many as 640 new technology jobs."

Summary

In 2017, Crown Prince Mohammed bin Salman launched his Vision 2030 reform scheme to boost jobs and revenue to prepare for a future with lower oil income. Saudi Arabia’s Public Investment Fund (PIF) announced on May 17, 2017, the launch of a state-owned military-industrial company. Currently, only two percent of the country's security and defense spending is local, but the government says it hopes to reach 50% by 2030.  

Saudi Arabia was in 2017 the world's fourth-largest military spender, hitting approximately US$63.7 billion. The move could alter decades of practice in which Saudi Arabia recycled a major part of its oil wealth back into Western economies via arms purchases and investments.

The Saudi Arabian Military Industries will employ tens of thousands of Saudi nationals and should limit the need for expensive arms imports. It is also hoped that the Military Industries will contribute $3.7 billion annually to the economy, and will be part of the kingdom's Saudi Vision 2030 diversification plans.