Nobuhiro Kubo, Tim Kelly
TOKYO (Reuters) – U.S. plans to use Japanese factories to boost production of Patriot air defence missiles used by Ukraine to protect against Russian attacks have been delayed by a shortage of key Boeing Co parts, four sources familiar with the matter said.
Japan’s Mitsubishi Heavy Industries (MHI) already produces about 30 PAC-3 missiles a year under license from defense contractor Lockheed Martin, and can increase that number to about 60, two Japanese government officials and two industry sources told Reuters.
The United States wants to increase annual production from about 500 to more than 750 worldwide as soon as possible, a person familiar with the plans said. But expanding production in Japan would be simply impossible without additional supplies of seekers, which guide the missiles during the final stages of their flight, officials and industry sources said.
Because of the shortage, “it could be several years before Mitsubishi Heavy is able to increase production,” said one industry source, who, like the others, spoke on condition of anonymity because they were not authorized to speak to the media.
The slump in Japanese production illustrates the challenges Washington faces in weaving industrial support from global allies into complex supply chains.
Boeing began expanding its Seeker factory in the U.S. last year to increase production by 30%, but the additional lines won’t start up until 2027. The company did not disclose production numbers last year but noted it had just delivered its 5,000th plane.
A Boeing representative referred questions to Lockheed Martin, the prime contractor for the interceptor.
Lockheed Martin has announced that it will increase US production of Patriot interceptor missiles from 500 to 650 by 2027, each costing roughly $4 million.
Even if sufficient seekers were available, expanding annual PAC-3 production in Japan to more than 60 aircraft would require Mitsubishi Heavy to build out additional production capacity.
As part of its plan to double defense spending in 2022, the Japanese government has said it will provide financial support to defense companies that want to expand production. But these subsidies will only apply to equipment for the Self-Defense Forces, not exports.
That means either Mitsubishi Heavy or the United States would have to foot the bill for building a new PAC-3 factory, which could cost tens of millions of dollars more, a Japanese government source said.
“The Indo-Pacific region is a major focus for the United States and our allies, and strategically positioned capabilities in the region are critical to supporting deterrence and maintaining readiness,” Lockheed Martin said in an email, referring questions about PAC-3 production in Japan to the Japanese government, U.S. government and Mitsubishi Heavy Industries.
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The Defense Ministry declined to comment, as did Mitsubishi Heavy Industries.
U.S. defense officials said a $4.5 billion contract awarded in June with the U.S. Army, the primary customer for the Patriot system, marked the beginning of a production ramp-up for the missiles and seekers.
The foreign and defense ministers of Japan and the United States are scheduled to meet in Tokyo this month to discuss strengthening defense industry cooperation, among other things, and the Patriot program is seen as a key part of that effort.
Even with support from allies, supply chain bottlenecks are complicating U.S. efforts to meet Ukraine’s needs for military equipment, including air defense systems that could thwart a Russian attack.
In the first wave of airstrikes in months, a Russian missile struck a children’s hospital in July, killing at least 41 civilians.
In December 2023, Japan relaxed military export controls to help replenish its stockpile of U.S. Patriot missiles earmarked for aiding Ukraine.
U.S. Ambassador to Japan Rahm Emanuel, who called this a “historic decision,” has been a leading advocate of strengthening military-industrial ties with Japan that could reduce the burden on U.S. defense-related companies.
U.S. President Joe Biden and Prime Minister Fumio Kishida agreed in April to deepen defense industry cooperation.
In an opinion piece published in the Wall Street Journal two months after the meeting, Emanuel said the U.S.’s shrunken military-industrial complex was a “weakness” exposed by the war in Ukraine and the Middle East conflict.
(Reporting by Nobuhiro Kubo and Tim Kelly; Additional reporting by Mike Stone, Alison Lampert, Idrees Ali and Kaori Kaneko; Editing by Jerry Doyle and Sam Holmes)