US DoD invests USD1 billion in L3Harris Missile Solutions
A THAAD interceptor is launched from the Reagan Test Site, Kwajalein Atoll, in the Republic of the Marshall Islands, during Flight Test THAAD-23 on 30 August 2019. (US Missile Defense Agency)
The US Department of Defense (DoD) and L3Harris have announced an agreement for a USD1 billion investment in L3Harris' new Missile Solutions business to expand production of solid rocket motors (SRMs), according to separate statements on 13 January.
The USD1 billion is a convertible preferred equity investment and the department's first such direct-to-supplier partnership, the DoD statement said.
It will make the DoD the anchor investor in Missile Solutions, which will be a publicly traded company focused solely on missile capabilities, the DoD said. The investment is through the Industrial Base Analysis and Sustainment (IBAS) authority, according to the department.
The partnership will enable the DoD and L3Harris to ānegotiate multi-year procurement framework agreements for solid rocket motors ā¦ pending congressional authorisation and appropriationsā, the statement said.
It will provide the āup-front investment and stability needed to increase production, modernise facilities, and bolster industrial resilienceā, the DoD statement said.
Along with anticipated long-term demand, the investment will support Missile Solutions' expansion of capacity for critical missile programmes, such as Patriot Advanced Capability-3 (PAC-3), Terminal High Altitude Area Defense (THAAD), Tomahawk, and Standard Missile, the DoD said.
āThis direct-to-supplier model is a crucial step towards replenishing stockpilesā and ensuring availability for critical components, Under Secretary of Defense for Acquisition and Sustainment Michael Duffey said in the statement.
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