Exclusive-US-Japan Patriot missile production plan hits Boeing component roadblock By Reuters

By Nobuhiro Kubo and Tim Kelly

TOKYO (Reuters) – A U.S. plan to use Japanese factories to boost production of Patriot air defense missiles, used by Ukraine to defend against Russian attacks, has been delayed by a shortage of a vital component made by Boeing Co, four sources said.

Japan’s Mitsubishi Heavy Industries already produces about 30 PAC-3 missiles annually under license from defense contractor Lockheed Martin (NYSE:) That number could rise to about 60, two Japanese government officials and two industry sources told Reuters.

The United States hopes to increase production from about 500 missiles a year to more than 750 a year worldwide as soon as possible, a person familiar with the program said. But officials and industry sources said any expansion would never be possible in Japan without additional supplies of the missile seekers that guide them in the final stages of flight.

“It could take several years before Mitsubishi Heavy Industries can increase production” because of the shortage, said one industry source, who like others declined to be identified because he was not authorized to speak to the media.

Japan’s production problem illustrates the challenges Washington faces in getting industrial aid from global allies into its own complex supply chains.

Boeing last year began expanding its U.S. research jet factory to boost production by 30%, though the additional lines won’t be operational until 2027. The company didn’t say last year how many planes it had produced, but noted that it had just delivered its 5,000th aircraft.

A Boeing representative referred questions to Lockheed Martin, the prime contractor for the interceptor.

Lockheed Martin said it plans to increase its U.S. production of Patriot interceptor missiles from 500 to 650 by 2027. Each missile costs about $4 million.

Even if enough researchers were available, expanding annual production of PAC-3 missiles in Japan to more than 60 missiles would require Mitsubishi Heavy Industries to build more capacity.

In its 2022 plan to double military spending, the Japanese government said it would provide financial assistance to defense companies that want to expand production. However, the subsidies only apply to equipment destined for the country’s Self-Defense Forces, not exports.

That means Mitsubishi or the United States would have to come up with the money to pay for a new PAC-3 factory, which could cost tens of millions of dollars or more, one Japanese government source said.

“The Indo-Pacific region is a major focus area for the United States and our allies, and strategic capabilities in the region are essential to supporting deterrence and maintaining readiness,” Lockheed Martin said in an email, referring to questions about PAC-3 production in Japan from the Japanese and U.S. governments and Mitsubishi Heavy Industries.

Japan’s Defense Ministry declined to comment, and Mitsubishi Heavy Industries also declined to comment.

A US defence official said the $4.5 billion contract signed in June with the US Army – the main customer for the Patriot system – marks the beginning of a ramp-up in production of the missiles and seekers.

Foreign and defense ministers from Japan and the United States are scheduled to meet in Tokyo this month for talks expected to include deepening defense industrial cooperation, and the Patriot project is seen as a key part of that effort.

Even with allied assistance, supply chain bottlenecks are complicating U.S. efforts to meet Ukrainian demand for munitions, including air defense systems capable of thwarting Russian attacks.

In the deadliest wave of airstrikes in months, a Russian missile in July hit a children’s hospital, killing at least 41 civilians.

In December 2023, Japan eased military export rules to allow it to help replenish U.S. Patriot missile stockpiles, which had been diverted to aid Ukraine.

US Ambassador to Japan Rahm Emanuel, who called it a “historic decision,” has been a leading proponent of deepening military-industrial ties with Japan that would ease pressure on US defence companies.

US President Joe Biden and Japanese Prime Minister Fumio Kishida agreed in April to deepen cooperation in the defence industry.

In an op-ed published in The Wall Street Journal two months after that meeting, Emanuel described the shrinking U.S. military-industrial complex as a “weak link” exposed by the war in Ukraine and the conflict in the Middle East.