Lockheed Martin unveils low-cost PAC-3 ACE amid Ukraine, Iran stockpile drawdowns

New deals follow President Trump’s promise to increase Patriot missile production for U.S. allies; Lockheed currently produces the PAC-3 MSE unit in Camden

By Wesley Brown, Arkansas Delta Informer Editor

July 20, 2026 — Only weeks after President Trump announced that the U.S. would grant Ukraine a production license to manufacture PAC-3 interceptor missiles, defense giant Lockheed Martin introduced a low-cost version of the weapon, built to defeat a wide range of air and missile threats against the U.S. military and its allies.

During the annual Farnborough Air Show attended by Gov. Sarah Sanders in Ireland, Lockheed today (July 20) announced the introduction of the PAC-3 Adapted Capability Effector (PAC-3 ACE), stating that the new lower-priced version would be built for less than half the cost of a PAC-3 MSE per unit.

Currently, the PAC-3 MSE, a critical component of America’s defense architecture, also known as the Patriot missile, is produced at Lockheed Martin’s Missiles Fire and Control (MFS) facility at the Highland Industrial Park in East Camden and Calhoun County.

Lockheed officials said the newer PAC-3 ACE will give allied forces a rapidly fielded, complementary air defense effector option that can be deployed in record time. To achieve this, the defense giant said it will collaborate with American and European industry partners and suppliers to enhance the resilience of the U.S. defense industrial base worldwide.

“American and allied warfighters need a solution that is battle-tested and budget-smart, and PAC-3 ACE delivers exactly that by building on the unrivaled performance of the PAC-3 MSE,” said Tim Cahill, president, Lockheed Martin Missiles and Fire Control. “As we look to partner with our allies, we can further enhance resiliency and ensure our forces can swiftly counter emerging threats today and tomorrow.”

Cahill did not say where the new PAC-3 ACE will be produced or what the cost will be. However, the newest PAC‑3 version will speed up development, testing and deployment far beyond traditional programs. It also ensures allied forces can field a common interceptor and bolster the PAC‑3 network at the same time.

“As we look to partner with our allies, we can further enhance resiliency and ensure our forces can swiftly counter emerging threats today and tomorrow,” said Cahill.

In April 2024, Lockheed’s PAC-3 team in Camden significantly increased production and set a new record high in missile output, delivering more than 500 PAC-3 MSEs.

Following the first ceasefire announced by the U.S. and Iran in April, the Washington, D.C.-based bipartisan think tank, Center for Strategic and International Studies (CSIS), defense industry analyst Mark Cancian said concern about the status of U.S. munitions inventories has intensified as reports emerge about high expenditures of Tomahawks, Patriots, and other missiles in the Iran war.

“As Operation Epic Fury remains paused in a shaky ceasefire, there is an opportunity to assess whether the U.S. military nears the point of going “Winchester”—or running out of ammunition,” Cancian said in an April 21 research note.

According to Cancian, a retired Marine Corps colonel and a senior adviser with the CSIS Defense and Security Department, more than half of the U.S. PAC-3 missile inventory has been depleted from the pre-war stockpile of about 2,330. Currently, it takes about 42 months for Lockheed to manufacture a batch of the formidable Patriot missile at a unit cost of  $3.9 million, the report stated.

In January, a landmark framework agreement was established with the U.S. Department of War to triple production capacity for PAC-3 MSE. Then in April, the U.S. government awarded Lockheed Martin a $4.7 billion contract to accelerate PAC-3 MSE production this year.

From England to Arkansas: Farnborough Air Show Impact on State’s Defense Sector

Going back to Gov. Asa Hutchinson, defense contractors in Arkansas have used the Farnborough International Airshow to make major announcements that have impacted the state’s burgeoning defense and aerospace industry.

Gov. Sanders announced last week that she and a delegation of Arkansas state economic development officials and business leaders would join an overseas trade mission to the Farnborough Air Show and Belgium from July 19 to 24, a major global trade exhibition for the aerospace and defense industries.

“This year, we’ll continue that proven track record at the Farnborough Airshow in the U.K. and in meetings with key business and government leaders in Belgium and Ireland,” said Sanders said in a statement. “International trade missions offer our team the chance to pitch Arkansas in person to some of the largest companies in the world, many of which focus on Arkansas’ largest export industry – aerospace and defense. I look forward to telling our great story this year and continuing to attract jobs and investment to the Natural State.”

Sanders’ trade mission this week will include panel appearances hosted by the Aerospace Industries Association, the Irish-American Chamber, and the Belgian-American Chamber, as well as meetings with Lockheed Martin, RTX, Radius Aerospace, General Dynamics, Hanwha, Kingspan, and other prospective investors.

In late February, Secretary of Defense Pete Hegseth, Sanders, and top Pentagon defense-industry leaders visited the Highland Industrial Park in East Camden as part of the Trump administration’s nationwide “Arsenal of Freedom” tour. During the Pentagon chief’s visit to Arkansas, his planned stops included meetings with officials from General Dynamics, Lockheed Martin, and Raytheon, three of the so-called “big five” defense contractors that receive the largest share of the Pentagon’s $1.5 trillion annual budget.

Other large defense contractors at the 18,780-acre defense-focused industrial park with 5,408,686 square feet of industrial and warehousing facilities include American Rheinmetall Defense, L3 Harris, Esterline Defense Group, and Raytheon-Rafael Area Production System, a $1.25 billion joint venture dedicated to producing and integrating Israel’s Iron Dome air defense systems in the U.S.

After the Pentagon debuted the newer Precision Strike Missile system for the first time in combat during Operation Epic Fury, Lockheed announced in early July that it is moving production of the aging U.S. Army Tactical Missile System (ATACMS) to Europe.

During the NATO Summit Defense Industry Forum on Tuesday (July 7) in Ankara, Turkey, Lockheed and the German defense conglomerate Rheinmetall announced they had signed a memorandum of understanding (MOU) to co-produce ATACMS missiles for the first time on European soil.

Lockheed and Rheinmetall, both of which have substantial operations at the Highland Industrial Park in East Camden, Ark., stated that the trans-Atlantic deal addresses the immediate demand for locally produced munitions in Europe. The deal also comes as the U.S. Army phases out the use of ATACMS in favor of newer, state-of-the-art Precision Strike Missiles (PrSMs), both produced by Lockheed in Camden.

“This partnership marks a watershed moment for European security and allied industrial cooperation. By combining Lockheed Martin’s unmatched missile expertise with Rheinmetall’s manufacturing excellence, we’ll deliver combat-proven capabilities faster and more efficiently to our allies,” said Jay Pitman, president of Lockheed Martin International.

“There is significant global demand for ATACMS, and we will continue producing them in Camden … for current contracts while European production will focus solely on future international orders and allow for growth of other production lines in Camden like the Precision Strike Missile,” a Lockheed Martin spokesperson told the Arkansas Delta Informer.  

The announcements by Lockheed and Rheinmetall were part of NATO’s Call to Action, urging financial institutions and allies to increase private capital investment in defense, security and resilience across the alliance. The deal was announced just hours before President Trump arrived in Turkey for the NATO summit, where he voiced criticism that U.S. allies in Europe need to quickly increase defense spending and support U.S. war efforts against Iran.

Besides the Lockheed-Rheinmetall facility in Germany, the two U.S. allies, along with the other NATO allies, announced plans at the summit to explore establishing a dedicated PAC-3 missile maintenance facility in Europe, a move that could eventually enable overseas production, military experts say.

The proposed facility includes commitments from the U.S., Germany, the Netherlands, Poland and Sweden to strengthen NATO’s integrated air and missile defense readiness by providing in-region maintenance and sustainment capabilities that keep PAC-3 missiles ready, reliable and rapidly deployable against evolving threats.

“Industrial cooperation strengthens the transatlantic defense industrial base and contributes to economic progress and shared security,” said Pitman. “Today, we are accelerating our work with NATO allies and industry partners to expand integrated air and missile defense capacity, strengthen regional sustainment networks and support the rising global demand for these capabilities.”

In addition, Lockheed Martin subcontractor L3Harris Technologies broke ground on two additional facilities in late June to support increased production capacity for the DoW’s PAC-3 propulsion systems. The additional buildings will be located on the company’s Arkansas Advanced Propulsion Facilities (AAPF) campus at Highland.

“We’re self‑funding these new facilities in Arkansas to move at the speed this mission requires,” said L3Harris CEO Christopher Kubasik. “This expansion boosts our ability to deliver PAC‑3 propulsion faster and at greater quantities, while strengthening military readiness and providing proven capability our warfighters depend on.”

L3Harris produces the PAC-3 MSE interceptor’s advanced two-pulse solid rocket motor, Attitude Control Motors, and the Lethality Enhancer for Lockheed. The two new PAC-3 propulsion facilities include a 75,000+ square-foot cast, cure, and final assembly facility and a ~70,000-square-foot case preparation facility.

The facilities will incorporate several advanced manufacturing capabilities, including automated X-ray inspection systems that leverage AI for rapid defect detection, fully automated casting, and expanded curing capacity to accelerate production throughput. 

As noted, the PAC-3 maintenance facility in Europe, the PAC-3 ACE deal, and L3 Harris PAC-3 expansion come as demand for the advanced missile interceptor grows worldwide, driven by its combat-proven performance in Ukraine and Operation Fury in Iran.

According to Mac Bergmann, director for CSIS’s  Europe, Russia and Eurasia program, since the U.S.-Israeli strike campaign against Iran began on Feb. 28, “the scale of interceptor consumption has been staggering,”  particularly for three key munitions types: anti-ballistic missile Terminal High Altitude Area Defense (THAAD) interceptors; ship-based surface-to-air SM-3 missiles; and mobile, land-based, surface-to-air PAC-3 MSE missiles.

“Annual production rates indicate that interceptors will be hard to come by when the smoke clears and U.S. allies seek to replenish stockpiles. Patriot interceptors in particular were already in critically short supply; according to the New York Times, just 620 of the most advanced Patriot PAC-3 MSE interceptors were delivered to militaries in 2025, while Kyiv has received only about 600 during four years of war,” Bergmann wrote in a March 23 research note.