US defence companies are wooing European rivals, targeting closer partnerships, as they seek to ensure they are not locked out of the region\u2019s military spending spree.<\/p>\n
Executives at some of America\u2019s biggest defence groups were at pains to underline their long-standing transatlantic ties at the Paris air show last week, while also promising to help European countries build up their sovereign capabilities<\/a>.<\/p>\n \u201cWe are an American company but we are also a global company,\u201d said Bernd Peters, vice-president of business development and strategy at Boeing\u2019s defence arm.\u00a0<\/p>\n The message to Boeing\u2019s partners in Europe \u201cas they think through their own sovereign capability\u2009.\u2009.\u2009.[is that] we are right there with them to help them develop that\u201d, he said at the show.<\/p>\n Anduril, the US defence tech group, signalled a similar approach after unveiling a new partnership to develop drones for Europe with Germany\u2019s Rheinmetall. <\/p>\n More US groups are eyeing joint development and local production opportunities, and Anduril said the alliance reflected a \u201cbuilt with, not built for\u201d philosophy \u2014 \u201cone that prioritises local control, transparency and adaptability over dependency or lock-in\u201d.<\/p>\n Europe\u2019s higher defence spending<\/a> \u2014 triggered by the war in Ukraine and pressure from US President Donald Trump to contribute more to the region\u2019s own security \u2014 was an opportunity US companies did not want to lose out on, said industry analysts. <\/p>\n While the US offers growth, Europe was where the opportunity was, especially as investors ask \u201cwhat\u2019s your growth rate, where are you finding new business\u201d, said Byron Callan, managing partner of research group Capital Alpha Partners.<\/p>\n America\u2019s leading defence contractors<\/a> have long-standing ties in Europe which represent a significant share of their annual revenues and they were hoping deeper partnerships would ensure they could still do business on the continent, according to industry experts at the show.<\/p>\n The region accounted for about 11 per cent of both Lockheed Martin\u2019s and RTX\u2019s annual revenues in 2024. Multiple European militaries have Lockheed\u2019s F-35 fighter jet, while RTX\u2019s Patriot missile was by far the market leader in terms of air defence.<\/p>\n Lockheed and Raytheon, the defence subsidiary of RTX, have in the past two years announced far-reaching co-production partnerships on the continent. Lockheed would establish large-scale missile production with Rheinmetall, while a joint venture between Raytheon and European missile maker MBDA would produce Patriot missiles for Nato in Germany.<\/p>\n Thomas Laliberty, president of land and air defence systems at Raytheon, said countries were taking \u201cdifferent approaches at what they mean by sovereignty\u201d. <\/p>\n Raytheon, he added, tried its best to \u201cunderstand each one of them\u2009.\u2009.\u2009.\u2009and to the extent that we can\u2009.\u2009.\u2009.\u2009help them meet those requirements\u201d.<\/p>\n Frank St John, chief operating officer at Lockheed Martin, told the Financial Times in Paris the company was expanding not only its supply chain in Europe, but also establishing manufacturing<\/a>.<\/p>\n The company\u2019s partnerships would \u201cserve us well as Europe looks to buy more within Europe because we will be a partner with European countries, companies in European countries\u201d, he said. <\/p>\n Lockheed, he added, was making sure the partnerships would be eligible for the region\u2019s funding and able to meet European requirements.<\/p>\n Boeing said it was \u201cstudying what collaborative opportunities would be available\u201d. Peters said the company was keen to replicate in Europe the co-development approach it took with Australia to develop an uncrewed combat aircraft, the MQ-28 Ghost Bat.<\/p>\n However, the US contractors also needed to navigate questions about whether America, under Trump, was a reliable ally, which has prompted calls from within the region to wean itself off US weapons.<\/a><\/p>\n Concerns \u2014 denied by the Pentagon \u2014 that the US could immobilise key weapon systems remotely such as the advanced F-35 fighter jet, have heightened calls for European nations to reduce their reliance on imported weapons.<\/p>\n One particular concern among European defence executives was that companies could in future encounter problems exporting new equipment or securing a software upgrade.<\/p>\n A weapon that was subject to America\u2019s International Traffic in Arms Regulations or Itar rules, cannot be built, sold or supplied to someone else without US consent and support. While the restrictions are not new, executives said questions over the reliability of Washington as a partner had sparked debate among some of its allies. <\/p>\n \u00c9ric B\u00e9ranger, chief executive of MBDA, said while the company valued co-operation with US partners, it was a matter for governments whether they \u201cwant to be under the Damoclean sword of being Itar or not\u201d. There are \u201cvarious attitudes\u201d among nations, he added.<\/p>\n Roberto Cingolani, chief executive of Italy-based Leonardo, said it was important to ensure the interoperability of weapons under the umbrella of the Nato security alliance. <\/p>\n Leonardo is part of a consortium with Britain\u2019s BAE Systems and Japan\u2019s Mitsubishi Heavy Industries developing a next-generation fighter jet and some analysts have questioned whether the project would deliberately try to remain free of US components or \u201cItar free\u201d.<\/p>\n \u201cI\u2019m\u2009.\u2009.\u2009.\u2009very neutral,\u201d Cingolani told the FT. \u201cWhatever we will do with our colleagues and with the Americans under the Nato umbrella, it has to be established in a very clear way.\u201d<\/p>\n For weapons to be interoperable between allied nations, he said, it was important to make sure individual countries had the ability to modify or upgrade the necessary software or components if needed. <\/p>\n US industry executives noted Washington\u2019s recent moves<\/a> to reform the country\u2019s \u201cforeign military sales\u201d process used to deliver arms to international partners should make it easier for defence companies to do business abroad. <\/p>\n European executives stressed the continent had the capabilities to defend itself but conceded it would take time. Even with more funding, the region still needed to reduce the fragmentation of its arms industry. <\/p>\n \u201cWe have the brains, we do have industrial tools, we do have people, we even have the money,\u201d Beranger said. \u201cIt is simply the matter of political willingness and the way we structure ourselves but we have the capabilities to be as sovereign as we want.\u201d<\/p>\n<\/div>\n\n
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