By Sabine Siebold
BERLIN (Reuters) -U.S. defence company Northrop Grumman expects continued growth in Europe even if the Russian war in Ukraine is halted, as nations aim to replenish weapons stockpiles depleted during the conflict, the company’s chief of international business said.
Speaking to Reuters last Tuesday, Steve O’Bryan declined to anticipate specific growth figures but pointed to the 32% increase in Northrop’s international sales during the last quarter.
“We’d expect Europe to be in the same category,” he said, adding that growth would be achieved primarily through partnerships rather than expanding the company’s local workforce or presence.
Northrop, maker of the B-2 Spirit stealth bombers used in U.S. strikes on Iran’s nuclear sites earlier this year, currently employs about 2,200 of its 95,000 global staff in Europe.
In Germany, Northrop has partnered with Rheinmetall on the production of the centre fuselage for Lockheed Martin’s F-35 fighter jets, as Rheinmetall, best known for its land systems, shifts part of its focus toward the aerospace sector.
O’Bryan also signalled strong growth prospects in the Middle East and Asia-Pacific regions as its international business grows faster than domestic business in the U.S., attributing the expansion to heightened regional tensions.
“In Asia-Pacific, it’s the growth of China and such, in the Middle East, we’ve seen it with Iran and the conflict in Syria, and in Europe, obviously Ukraine and Russia,” he said.
CONVENTIONAL WISDOM NOW FAVOURS HIGHER STOCKPILES
Amid talks on ending the war in Ukraine prompted by a new proposal for peace by Washington last week, shares of European arms makers fell for a second successive session on Monday to their lowest in more than four months.
O’Bryan said a potential ceasefire in Ukraine would not hamper the company’s business trajectory, highlighting what he said were nations’ realization that their stockpiles were too low for conflicts akin to Ukraine.
“It has become conventional wisdom that the stockpiles need to be much higher than they were (…) So this is not only production to refill the stockpiles, but it’s production that needs to grow for years and years to come,” he said.
He also noted that there had been no sales fluctuations following the Gaza ceasefire agreement between Israel and Palestinian militant group Hamas that took effect last month.
With air defence sales booming around the world, the company is marketing its Integrated Battle Command System (IBCS), a fire control and battle management platform that can integrate various missile defences, including Raytheon’s Patriot, Israel Aerospace Industries’ (IAI) Arrow, and the U.S. THAAD.
The system is currently fielded in Poland, and Northrop has signed agreements with German missile makers Diehl and most recently MBDA to explore a closer collaboration in Europe.
O’Bryan said that more than 12 countries have expressed interest in IBCS, though he did not specify the nations.
(Reporting by Sabine SieboldEditing by Frances Kerry)
