American defense contractors arrived at Britain’s Farnborough Airshow this week with hopes of capitalizing on a surge in European military spending — only to find their customers increasingly wary of depending too heavily on U.S. suppliers.
Across the continent, European governments are pushing for greater control over the weapons they purchase, demanding more production on home soil and a larger share of industrial benefits. In response, U.S. defense companies are ramping up manufacturing operations in Europe, forming partnerships with local firms, and offering more customized products.
“We hear loud and clear: Europeans want more sovereignty, and they want more localised capability,” said Daniel Tenney, Lockheed Martin’s senior vice president of global business development and strategy.
Pledges to Localize Production
As NATO’s European members and Canada dramatically boost their defense budgets, U.S. companies are making the case that purchasing established American systems is faster and more cost-effective than building new ones from scratch — while also committing to move production and technology closer to their customers.
At Farnborough, Lockheed unveiled plans for a lower-cost Patriot interceptor to be developed alongside European and American partners. That announcement followed a separate disclosure about plans to manufacture an Army Tactical Missile System, known as ATACMS, in partnership with Germany’s Rheinmetall. RTX’s Raytheon also recently announced partnerships with European companies to expand production of Stinger missiles, including assembly operations in the Netherlands.
Thomas Laliberty, president of Raytheon’s land and air defence systems, noted that widely used platforms like the Patriot benefit from shared investment among the many countries that operate them. “They get a lot of benefit from that collective,” he said.
Newer defense technology companies are also making their presence known. Anduril made its first major appearance at Farnborough, highlighting an expanded workforce in the United Kingdom and an agreement to establish local production of its Barracuda-500M cruise missile in Poland.
“Each government has a different localisation need,” said Anduril UK General Manager Richard Drake.
Europe Moves Toward Greater Autonomy
Despite these efforts, some European officials and analysts worry that the United States could become less willing — or less able — to supply weapons, spare parts, or technical support in the future, particularly if American defense companies are required to prioritize U.S. military needs elsewhere in the world.
Industry insiders say European nations no longer simply want finished weapons systems. They want access to the core technology that would allow them to build, modify, and maintain equipment on their own — what one expert described as “a significant IP transfer.” That phrase came from Fabio Dal Pan, a Milan-based senior partner at Boston Consulting Group.
While Europe still depends heavily on American defense suppliers, the possibility that this shift toward independence could become a permanent trend is “of huge concern,” according to Tom Waldwyn at the International Institute for Strategic Studies, a UK-based think tank.
Certain equipment, such as F-35 fighter jets and Patriot air-defense systems, cannot easily be replaced by European alternatives in the short term. However, in other categories, European options may be competitive — and in some cases even cheaper — according to Sash Tusa, an aerospace and defense analyst at UK-based research firm Agency Partners. He pointed to medium-range air defense missile systems as one such area.
Europe is already making headway in reducing its reliance on American equipment in some sectors. NATO recently announced a roughly $4.5 billion plan to purchase up to 10 Saab GlobalEye surveillance aircraft to replace aging AWACS early warning planes — choosing a Swedish system over a competing offer from a U.S. aircraft manufacturer.
Meanwhile, European nations are also working to develop cutting-edge technologies independently. At the Farnborough Airshow, UK-based BAE Systems revealed a new unmanned fighter jet that the British government announced it is adopting as its “operational concept demonstrator” — even as several U.S. companies displayed their own similar aircraft at the same event.
Britain’s program will involve multiple vendors but will remain “sovereign,” Air Vice-Marshal Jim Beck, the UK Royal Air Force’s director of capability and programmes, told Reuters. “We need the right to do what we want with our kit at the point of our choosing,” he said.
