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Raytheon Partners With U.A.E. To Continue Unsuccessful U.S. Proposal

The U.S. Army had a program called Advanced Precision Kill Weapon System (APKWS). This system would take the standard 2.75 inch rocket fired from helicopters and provide some form of guidance for it. The idea was to improve lethality and accuracy for a system that can fire a great deal of rounds quickly. The original development program contract was awarded to General Dynamics (GD). This contract was canceled due to poor performance of the system in 2005.

The Army and other services went ahead and started a new program called APKWS II less then a year later. This involved a competition between multiple companies submitting different proposed systems. The winner of this was a team led by BAE Systems (BAE.L). Raytheon (RTN) was one of the losing proposers. APKWS II continues in development and test for use by the Army, Navy and Marine Corps aviation systems.

Raytheon recently announced as part of their Dubai Air Show program that they would continue development of their APKWS II proposal with Emirates Advanced Investments (EAI). The goal is to make a system in the U.S. with the help of EAI's financing and support that will find customers overseas and perhaps with the U.S. military if the price is right.

There have been times in the past when U.S. companies have done this sort of thing on their own with systems built for but not bought by the Defense Department but they have been rare. There have also been a few cases of privately developed weapons systems for overseas customers. The problem faced by all these kind of attempts is that the U.S. has lots of laws and regulations governing what can and cannot be exported. For example the laser guidance system used in the Raytheon rocket cannot be manufactured overseas.

Raytheon is taking advantage of the money available from outside the U.S. to continue a promising design. Because it still meets all of the U.S. requirements it could be sold to them. Raytheon is hoping that they can undercut the price of the BAE Systems developed rocket and not only get foriegn customers but ultimately U.S. ones as well. Several other deals like this may start showing up as other countries with funds invest in U.S. R&D to support their military.

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