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Business

Europeans May Aid US Firms with 'Star Wars'

American defense contractors Lockheed Martin and Northrop Grumman say they will cooperate closely with European companies on the development of George W. Bush's so-called "Star Wars" missile defense system.

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It's hoped the "Star Wars" defense system can prevent a nuclear war

In a joint memorandum of understanding with EADS -- Europe's largest aeronautics company and holder of 80 percent of the shares in Airbus -- issued on Tuesday in Berlin, the companies said they would work together to develop missile defense systems for the United States, Europe and Asia. The deal could mean billions in business for EADS and other contractors.

"EADS and Lockheed Martin intend to further expand the breadth and scope of their cooperation in missile defense" said Jean-Louis Gergorin, a member of EADS' executive committee. "By bringing together our experience and capabilities, we will be in a position of strength to provide our governments with a joint solution for a global response to a global threat".

Italy's Alenia and Britain's BAE Systems are also expected to take part in the cooperation, which brings full circle a deal closed two years ago between EADS and arch-rival Boeing to cooperate in the system's development.

Boeing is currently the lead contractor on missile defense development in the U.S.

Protection for US and NATO allies

For Europe's NATO members, the development of the missile defense system -- depending on its scope and the level of participation -- could turn into a multi-billion euro program. But it also faces an uphill battle -- EU governments must approve the program and find room for it in their already tight defense budgets. So far, the only European country that has given the missile defense program a thumbs up is Britain. Many European governments are wary of the missile defense system because they believe it could anger Russia and that it would further promote US unilateralist policies.

But the project could also bring huge rewards for European industry. Industry observers told the Financial Times Deutschland that the US could invest as much as $8 billion annually in the program.

But defense experts have also questioned the effectiveness of the missile protection shield, which is supposed to destroy incoming missiles in space using either fast anti-missile rockets that crash into the missile in mid-air or laser beams that can also destroy missiles.

For the Europeans, the opportunity to cooperate with the US industry would be an important step toward getting a foothold on the American defense market, where foreign firms are virtually shut out under protectionist US defense contracting laws.

Lockheed Martin, Northrop Grumman, EADS, Raytheon, CSC, IABG, INO and several Israeli firms are among those attending a Berlin conference on missile defense systems this week.

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