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From NY Times:

"March 24, 2000


After Finding Defect, Army Replaces Hundreds of
Missiles on Alert

By ELIZABETH BECKER

ASHINGTON, Mar. 23 -- The Army said today that it had replaced hundreds of
Patriot missiles protecting American troops stationed in Korea, Saudi Arabia and
Kuwait after discovering a malfunction in the missile's radio link.

The Army also notified seven allied nations that operate Patriot missile batteries of the
problem, said Lt. Gen. Paul Kern, who made the announcement at the Pentagon.

The concern centered on missiles kept on full alert, or hot status, for more than six months at
a time and was discovered in routine testing at the Red River Army Depot in Texas.

"We made the decision a little over 10 days ago to actually replace the missiles," General
Kern said.

Germany, Israel, the Netherlands, Kuwait, Saudi Arabia, Japan and Taiwan all have Patriot
missiles, but General Kern said the missiles in those countries were on full alert for shorter
periods.

The Patriot missiles replaced over the past 10 days are an advanced version of those first
used against Iraqi Scud missiles in the 1991 Persian Gulf war.

The decision to replace the missiles was first reported today by The Wall Street Journal.

The manufacturer, Raytheon, said that it was not liable for the current problem because the
so-called PAC-2 system offered only a six-month warranty for keeping the missiles on a full
alert.

"We have a pretty good handle on the components that are failing," said David Shea, a
Raytheon spokesman, "but we have not confirmed the exact cause of the problem yet."

The Patriot missiles are the sole protection against an enemy missile attack for the 27,000
troops in South Korea and 2,800 soldiers in the Persian Gulf region, and an Army
spokesman said the replacements provided full protection for the American bases.

"Our deployed forces are not at risk," the spokesman, Maj. Scott Hays, said.

The problem was discovered when several of the missiles were disassembled in routine
checks at the army depot last fall. Components of the radio link that allows the missile to
communicate with ground radar in tracking a target were found to be seriously degraded.

Major Scott said that missiles kept on full alert must be warm and ready for use at a
moment's notice. The heat, and intermittent cooling periods, may account for the problem in
the missile parts.

After further testing and discussions with regional commanders who oversee the Patriot
batteries, the army decided to replace the missiles that had been on full alert long past the
six-month warranty period.

General Kern said the cost of replacing the components alone was $80,000 to $100,000 for
each missile, but he could not estimate the total cost for the repairs.

The Army has enough missiles and component parts to replace the suspect missiles in its
arsenal but is uncertain whether the supply is large enough to cover requests for replacements
from the allies. Japan, however, produces its own Patriots, Major Hays said.

Raytheon and the Army are producing a new version of the missile, which will be available
next year.

"We do not believe this will have an adverse impact on our foreign sales or on our stock
prices," said Mr. Shea, noting only a slight dip in the company's stock price today."





Ben
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