Sabine Siebold
BERLIN (Reuters) – U.S. defense company Northrop Grumman expects continued growth in Europe even if Russia's war in Ukraine is halted as countries seek to replenish weapons stockpiles depleted during the conflict, the head of the company's international business said.
Speaking to Reuters last Tuesday, Steve O'Brien declined to expect specific growth figures, but pointed to a 32 percent increase in Northrop's international sales in the most recent quarter.
“We expect Europe to be in the same category,” he said, adding that growth will come primarily through partnerships rather than expansion of the local workforce or company presence.
Northrop, maker of the B-2 Spirit stealth bomber used in US strikes on Iranian nuclear sites earlier this year, now employs about 2,200 of its 95,000 employees worldwide in Europe.
In Germany, Northrop is partnering with Rheinmetall to produce the center fuselage for Lockheed Martin's F-35 fighter jets as Rheinmetall, best known for its ground-based systems, shifts some of its focus to the aerospace sector.
O'Brien also reported strong growth prospects in the Middle East and Asia-Pacific as its international business grows faster than its domestic U.S. business, attributing the expansion to increased regional tensions.
“In the Asia-Pacific region it's the rise of China and things like that, in the Middle East we've seen it with Iran and the conflict in Syria, and in Europe obviously with Ukraine and Russia,” he said.
Conventional wisdom now favors increasing supplies
Amid negotiations to end the war in Ukraine sparked by Washington's new peace proposal last week, shares of European arms makers fell for a second straight session on Monday to their lowest level in more than four months.
O'Brien said a potential ceasefire in Ukraine would not hinder the company's business, underscoring what he said was countries' understanding that their reserves are too small for conflicts like Ukraine's.
“It became generally accepted that stocks should be much higher than they were (...). So it's not just production to replenish supplies, but production that should be growing for many years to come,” he said.
He also noted that there had been no fluctuations in sales since the Gaza ceasefire between Israel and the Palestinian group Hamas, which came into force last month.
With air defense sales soaring around the world, the company is marketing its Integrated Battle Command System (IBCS), a fire control and combat management platform that can integrate a variety of missile defense systems, including Raytheon's Patriot, Israel Aerospace Industries' (IAI) Arrow and the US' THAAD.
