Braxton Taylor
Despite the Trump administration’s jarring shifts in foreign and trade policy, some international companies are laying plans to expand their defense business in the United States, executives said in interviews.
Saab increased its American manufacturing footprint this past year, adding facilities in Rhode Island to build uncrewed underwater vehicles and munitions in Michigan. The company also has a presence in Indiana for the fuselage for the Boeing-Saab T-7 jet and deep tech research.
“You have a European company investing a lot in America…and we’re looking to potentially invest more,” Michael Brasseur, Saab’s vice president and chief strategy officer for its U.S. business, said in an interview.
Saab and other European companies are navigating sudden turmoil in their countries’ relationships with the United States, which has imposed higher tariffs and cast doubt on its fidelity to its NATO allies. Vice President JD Vance’s scolding of European governments at February’s Munich Security Council rattled many—but not Brasseur.
“We’re actually investing a lot more in the U.S., not as a result of Munich, but just the way we do business. And so, I think we have a really interesting niche that we fit in based on our long heritage of building really good hardware and then this pivot that leverages the amazing, emerging, disruptive technologies out there. The power is in the convergence of these capabilities,” he said.
But Saab isn’t the only European company eyeing more U.S. defense business.
Lufthansa Technik, a subsidiary of the German-based aviation group, wants to expand its defense business in Tulsa, Oklahoma, where it has a major jet engine maintenance and repair outfit.
“Our name is not known here. A lot of people don’t even know how to pronounce Lufthansa Technik. Even when we’re walking around Tinker [Air Force Base], you’ll hear people say things like, ‘Oh, you know, I was at Ramstein. I flew on Lufthansa.’ But they aren’t familiar with us. And so we’re really trying to enter that market carefully and precisely,” said Gilbert Sanchez, Lufthansa Technik’s senior manager for defense acquisition.
As a result, Sanchez said, the company is doing the slow, deliberate work to ready itself for more defense contracts, including hiring consultants to become compliant with defense acquisition regulations, assessing its cybersecurity, and working with prime contractors.
“In the U.S., again, we’re going to try to implement defense work in both the component shop and the engine shop,” he said. “We’ve been using several consultants, defense consultants, to help us be DFAR-compliant and ready. We’ve had cybersecurity, NIST assessments…a lot of that’s happening right now. And we’re also currently working with several primes to also get our toe in the door, if you will, and then answering some RFIs directly.”
Globally, the company does engine washes for the Air Force’s C-17s under a Boeing contract, plus work with Royal Canadian, Czech, Italian, Royal Thai, Royal Australian and Royal New Zealand Air Forces. It also works with the Indian Navy’s P-8As.
In the United States, the goal is to service “commercial-derivative aircraft” like the KC-46, P-8, and Boeing’s 767 or 737 Next Generation, as opposed to top weapons, Sanchez said.
But breaking into the U.S. defense market is tricky, especially when it comes to landing contracts where the Pentagon wants commercial-based solutions but doesn’t write contracts to reflect it.
“It feels like the Air Force, the [U.S. defense] market, they wanted to go with these commercial-derivative aircraft to really gain some of the advantages that the commercial operators are getting to avoid obsolescence,” Sanchez said.
“When they are rolling out these RFQs, these RFPs, they are very DFAR-heavy…And so what you really see is a lot of the [maintenance, repair, and overhaul companies] that normally would be supporting commercial aircraft, not necessarily in that market,” he said. “Sometimes those barriers may have been put there on purpose just to make sure that really sharp people enter that market. So we’re attempting to do that.”
Aerospace and defense is the second-largest sector of Oklahoma’s economy, worth some $44 billion a year. The state opened a Fires Innovation Science and Technology Accelerator, or FISTA, facility at Fort Sill. FISTA specializes in missile defense but also has facilities and courses dedicated to drone and counterdrone warfare.
This week, the state welcomed Brazil-based CBC Global Ammunition, one of the world’s largest ammo producers, which has pledged to spend $300 million to build its first U.S. factory in the state—and create 350 jobs.
“This decision reflects our long-term commitment to the United States and to the values we share: trust, transparency, innovation and security,” Fabio Mazzaro, CBC’s president and board member, said during the SelectUSA Investment Summit on Monday outside Washington, D.C. “But more than just numbers, it also presents a strategic capability: the only facility of its kind in the United States that will produce everything in house, from brass cups to bullets, cases, primers, propellant and even nitrocellulose,” ensuring “reliable access to essential defense materials, including those today that you have global disruptions in the supply chain.”
Trump has long sought to boost U.S. manufacturing, but his second-term efforts have been more energetic, with executive orders and tariffs—particularly on European goods.
“It is an issue that is top of mind, but the long-term impacts are very difficult to predict,” said Dak Hardwick, vice president of international affairs for the Aerospace Industries Association.
Hardwick said it may take months to begin to understand the effects of the tariffs.
“There are different rates for different parts and components or trade that we have in aerospace and defense. There are rates for steel and aluminum that may be different than we have on the reciprocal rates between countries. There are different reciprocal rates [in] different countries. The President has talked about that,” he said.
Hardwick said other countries could choose to respond by imposing new tariffs of their own. And because the aerospace and defense sector manufactures, imports, and exports, the “business relies on certainty from the U.S. government in order to execute the mission that it’s given by that government,” he said. “We’re keeping an eye on those, and we’re working with our sister international organizations to ensure that those don’t have a negative downstream impact on the industry.”
It’s not clear yet how much of the tariff burdens are going to be absorbed by prime contractors, lower-level suppliers, or customers, Hardwick said.
“It is a very fluid situation. There are a lot of moving parts on tariffs overall, especially since there are different types of tariff authorities that are being used, different tariff rates that are being used, and different countries that are involved,” he said.
Oklahoma’s Republican Gov. Kevin Stitt said the Trump administration’s trade policies had somewhat disrupted the complex supply chains for the aerospace and defense sector.
“Aviation companies have told me that they’re at a little bit of a disadvantage,” Stitt told reporters at the SelectUSA conference Monday. “Aerospace and defense is huge in Oklahoma. We obviously have the largest maintenance and repair facility in the world at Tinker Air Force Base in Oklahoma City. It’s about 30,000 employees. But that supply chain is kind of worldwide, with our allies.”
But Stitt was optimistic.
“We’re going to come up with a good solution. But I think, ultimately, we want to get our supply chain a little closer to home, make sure it’s back with our friends and our allies and people that have our same interests at heart,” he said.
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