For more than a decade, Klune Industries Inc. has been making rocket and launcher components for defense supplies giant Lockheed Martin.

On Thursday that partnership took on greater significance with a new deal that’s expected to bring in more than $400 million in sales to the Utah economy over the next 20 years.

Klune on Thursday unveiled a new $1.6 million, 26,000-square-foot plant in Spanish Fork that makes components exclusively for Lockheed’s Guided Multiple Launch Rocket System, or GMLRS missile — a guided rocket system with increased range and accuracy that deploys with minimal collateral damage. That new plant will be an addition to its existing 170,000 square-foot plant, which specializes in precision machining and metal cutting.

The North Hollywood, Calif.-based aerospace and military components maker has 580 workers companywide, 270 of which are in Spanish Fork.

Speaking to hundreds of business representatives at Klune’s new plant Thursday, Lockheed Martin executive Lanny Humiston stressed that while America’s war with Iraq and Afghanistan helped fuel demand for more smart missile guidance and navigation products, an urgent need to replace aging weapons inventory at the strategic arsenals of the United States and its allies worldwide is a bigger driver of new business.

“Even if we didn’t have wars like the one with Iraq, we still need to reinforce our weapons arsenal and that of our allies,” said Humiston, director of Lockheed’s MLRS division in Dallas. “That’s one of the first lessons we learned during the Gulf War — the need for precision weapons in the face of weather and other poor launch conditions. The war with Iraq isn’t driving quantity and urgency. But the need to replace aging inventory is.”

Humiston estimates there are as many as 600,000 unused rounds and 140,000 guided rockets positioned worldwide that need to be replaced over the next 20 years. By 2009, Klune expects to make parts for about 6,000 rockets a year, up from just 1,000 rockets a year currently, he said. The company plans to make parts for 53 launchers for delivery in 2007. Each launcher project generates $11,000 in revenue for Klune, while each rocket project generates $2,850.

“That means more jobs for us, and it’s a great technology that not only saves lives but is also able to detonate with minimal collateral damage,” said Spanish Fork Mayor Joe Thomas.

Gordon Clune, president of Klune Industries, cites the company’s skilled and entrepreneurial work force and low production cost strategy as factors that helped secure its new contract with Lockheed Martin.

Klune’s Spanish Fork division alone is expected to generate $100 million in sales, up from $83 million last year. Klune’s products range from simple sheet metal brackets to aircraft airflow skin assemblies.

This story appeared in Spanish Fork Press on page A7.