Key facts
- U.S. defense companies are expanding manufacturing and forming joint ventures in Europe.
- European governments are demanding greater control over defense equipment and local production.
- Lockheed Martin is developing a lower-cost Patriot interceptor and producing ATACMS with Rheinmetall.
- RTX's Raytheon is increasing Stinger missile production with European partners.
- Anduril plans local production of its cruise missile in Poland.
- NATO is purchasing Saab GlobalEye surveillance planes, opting for a Swedish system over a U.S. one.
U.S. defense companies are facing increasing pressure from European governments to localize production and technology as these nations boost military spending and seek greater control over their defense capabilities. At the Farnborough Airshow, American arms makers highlighted efforts to meet these demands through expanded manufacturing, joint ventures, and tailored products.
Lockheed Martin announced plans for a lower-cost Patriot interceptor and the production of the Army Tactical Missile System (ATACMS) with Germany's Rheinmetall. RTX's Raytheon is also increasing Stinger missile production with European partners, including assembly in the Netherlands. Defense-tech firm Anduril has expanded its UK workforce and plans to produce its Barracuda-500M cruise missile in Poland.
European nations are increasingly seeking not just finished products, but also access to underlying technology to build, modify, and maintain equipment themselves, with a desire for significant intellectual property transfer. While some critical systems like F-35 fighter jets and Patriot air-defense missiles remain heavily reliant on U.S. supply, Europe is making progress in developing its own capabilities. NATO recently announced a plan to purchase Saab GlobalEye surveillance planes, opting for a Swedish system over a Boeing rival. BAE Systems also revealed a new unmanned fighter jet adopted by the UK government, emphasizing its sovereign nature.
Industry specialists express concern that the shift towards greater European autonomy could become a long-term trend, potentially impacting U.S. defense companies if they need to prioritize domestic needs.