Sales of ballistic missile defense systems and components have grown to make up 10 percent of the revenues in Lockheed Martin [LMT], the largest defense contractor, a senior official said yesterday.

"About 10 percent of our sales last year were in the missile defense" area, according to John W. Holly, vice president of Lockheed operations at Huntsville, Ala., briefing defense journalists at the National Press Club.

As the Navy increases the size of its fleet equipped with the Aegis missile defense weapon control system, it likely will be an advanced version of the system, according to Nick Bucci, Lockheed director of Aegis ballistic missile defense development programs.

As the Navy buys more new DDG 51 Arleigh Burke Class destroyers from General Dynamics [GD] and Northrop Grumman [NOC], the ships coming out of the GD Bath Iron Works and Northrop Ship Systems yards likely will have an advanced version of the Aegis system, Bucci said, similar to existing destroyers undergoing modernization.

While the Navy now plans to buy a third stealthy DDG 1000 destroyer, the sea service has decided, it then proposes buying several of the existing-design DDG 51 Arleigh Burkes.

On other points:

• The Lockheed Patriot Advanced Capability-3 (PAC-3) missile defense system is popular, with 900 of the missiles on order, Holly said.
• While U.S. intelligence sources have estimated Iran wouldn’t have an intercontinental ballistic missile (ICBM) until 2013, and Israeli intelligence sources estimated it would be 2010, Iran just announced it launched a prototype satellite. (U.S. defense officials are questioning whether the launch was successful.) Launching satellites involves much the same technology as ICBMs. Iran also is producing nuclear materials that U.S. leaders fear will be used to make nuclear weapons. But the U.S. missile defense system for Europe (EMD) won’t likely be in place to counter Iranian threats until 2012 or later. (Secretary of State Condoleezza Rice and Polish Foreign Minister Radoslaw Sikorski yesterday signed the agreement for the United States to place 10 interceptors in silos in Poland. Czechs already signed a deal to host a radar. Czech and Polish parliaments have yet to provide needed legislative approval.) But Holly said that meanwhile, if Iran launches a missile at the United States, it could be defeated by the existing Ground-based Midcourse Defense system in Alaska and California, from which the EMD system will be derived.
• The United States must have a strong, capable missile defense system, he said, because the devastation caused by even one enemy missile tipped with a weapon of mass destruction would be incomprehensible, if it struck an American city. "The consequences of failing in this mission area are too great to contemplate," Holly said.
• Since Democrats took over Congress last year, there has been extensive debate about funding for at least some missile defense programs. But Holly said, in responding to a question, that lawmakers overall have backed formation of a missile defense shield. "Congressional support for missile defense has been bipartisan for over 15 years," he said. Regardless of whether Sen. John McCain of Arizona, the presumptive Republican presidential nominee, or Sen. Barack Obama of Illinois, the presumptive Democratic nominee, is elected to reside in the White House, the next president will have to respond to real world situations, including actual missile threats confronting the United States, Holly said.