European missile manufacturer eyes bigger share of U.S. market.

• Author: Erwin, Sandra I.

* Pentagon officials have said it ad nauseam: More competition in the defense industry is needed to spur innovation and stem rising weapon costs.

In a weapons market that will become increasingly cutthroat as budgets decline, such statements are not being taken lightly by companies that are eager to challenge incumbent contractors.

"We are big fans of competition," says Doug Denneny, vice president of MBDA Inc., the U.S. subsidiary of Europe's largest missile manufacturer.

MBDA has manufacturing plants in France, the United Kingdom, Italy and Germany. The U.S. subsidiary, based in Arlington, Va., opened a research and manufacturing facility in Westlake Village, Calif, and an assembly plant in Huntsville, Ala.

The company hopes to gain a foothold in the market for air-launched ground-attack missiles that is now dominated by Lockheed Martin's Hellfire. The Army for years has been working on a more modem version of the Hellfire, called the joint air-to-ground missile, or JAGM. But funding cuts and delays in the program have opened a window for MBDA to jump in and suggest that it can offer the Pentagon a comparable weapon that is already in the inventory of the U.S. military's closest ally.

MBDA is marketing its Brimstone as a more practical, cost-saving alternative, Denneny says. "It is already in production and in operation in Afghanistan by the U.K. Royal Air Force."

The Army's program executive office for missiles at Redstone Arsenal, Ala., which oversees the JAGM program, has not yet agreed to consider new competitors, but may do so in a couple of years. Up until last summer, there were two contenders, Raytheon and Lockheed Martin. The Army in July knocked Raytheon out of contention because of budget cuts and concerns that the company's JAGM design was too complex.

Lockheed is now the only contractor that continues to receive Army funding to complete its JAGM design.

MBDA is offering Brimstone to the U.S. Air Force for its Reaper drones, and to the U.S. Navy for the F/A-18 Super Hornet air-craft and for the Littoral Combat Ship.

The company acknowledges that an Army contract is a long shot. And it has not been shy about playing the industrial base card. "Future versions of Brimstone for the United States will be manufactured in the United States," says Denneny. The company has laid out a factory for Brimstone production at its Huntsville facility, and expects to buy tooling and machinery once it secures a contract.

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