Contractors such as Lockheed, Boeing, Northrop and Raytheon Co expect regional demand for their products and services to help them offset Pentagon belt-tightening forced by U.S. deficit-trimming measures.
These four companies are best-placed to benefit because of their work with satellites, radar, tracking stations and missile interceptors, said Richard Whittington, an aerospace and defense research analyst at Drexel Hamilton, a broker-dealer.
In a move that could fuel a new market of its own, the administration in December formally proposed a $1.2 billion sale of Northrop Grumman’s high-flying RQ-4 “Global Hawk” spy drones and related gear to South Korea.
The Global Hawk carries cloud-piercing Raytheon sensors to scan large areas for enemy forces by day or night. It would boost Seoul’s ability to monitor North Korea.
Seoul had shown interest in the Global Hawk system for more than four years. The White House delayed proposing it until now, partly for fear of stirring a regional arms-race dynamic.
A Global Hawk purchase by Seoul would mark its first sale in the Asia-Pacific. Australia, Japan and Singapore each have shown interest as well, according to Northrop Grumman.
The notice of the possible South Korean purchase came less than two weeks after North Korea, on December 12, advanced its missile program with a long-range rocket launch that put a satellite in space, in defiance of U.N. resolutions. The North is banned from testing missile or nuclear technology under sanctions imposed after its 2006 and 2009 nuclear weapons tests.