As European defense evolves, here’s how industry is responding

WASHINGTON — As priorities in Europe evolve, particularly with the threat of Russia growing more profound, industry partners are left to adapt. Defense News spoke to Kim Ernzen, vice president of land warfare systems in Raytheon Missile Systems, to find out the company's approach to meeting customer expectations.

EU and NATO cooperation on defense is evolving. As they work out roles, is it challenging for industry?

From an international or global footprint, we are looking to continue to expand in international marketspaces. As we look particularly to EU and NATO starting to cooperate more, the EU brings some capabilities to the table. Obviously NATO is typically backed more from the U.S. [But] it's how we merge the capabilities together so the fighting forces have what they need when they go into harm's way. From a U.S. defense industry perspective, we like to make sure we protect the latest and greatest. When we look to international, we work through the normal releasability channels to make sure we can release our products.

I think there is going to be increased opportunity, because the threats are continuing to evolve. From a pure RMS perspective, we're well positioned to support [combatting] those threats. We continue to work closely not only with the U.S.-based customer, but through them, the international partners to look at the capabilities they may need.

Missile defense remains a huge priority in Europe, but how have hybrid warfare tactics, particularly from Russia, influences defense strategies and as a result the investments?

As we as a nation look at how to pivot from urban warfare of the last two decades to what many would consider more traditional warfare, but with added complexities of things like cyberattacks, EW. So now you go into overmatch capability, a long-range standoff capability. Army is focused on how to get long-range precision fires that supports the [combatant commands] in the international footprints, being able to protect the European front against advancing Russia threats. And it's got to have that standup capability, they also have to be able to see further. From a company perspective, we're involved in the PRSM [program] — the new Long Range Precision Fire competition between us and Lockheed Martin. And we're also working to enhance the sighting capability on the vehicle, so they can see farther and identity threats sooner.

We see a lot of exercises in Europe. Does industry have enough of a seat at the table?

We don't necessarily engage one-on-one with the exercising activities that go on; we'll get feedback through customer communities. This is something we talk with our customers about continually: the more we can be engaged, the more we can bring to bear, whether company investments, a spin on the product; the more we can partner with the customer community, sooner, the better it is for them and us as well. We just haven't necessarily always done that.

We've seen a great deal of emphasis on increased defense spending of our European allies. Have you seen a bump up? Or if not, where do you see them focusing in on in terms of spending?

We have seen a modest increase, particularly across the munitions fronts. Everyone [is looking] in the cupboard drawer, wanting to make sure they have the right stockpiles should they need to go into any engagement with the enemy. We're also continuing to see internationally more system integrated solutions. Not just coming forward with a product, but how a system would work and operate so they can be more nimble in the battlefield. That's a transition we're seeing.

The FMS system can be painful to work through. Have their been improvements?

We need to look at [whether we] can start converting more programs to direct commercial sales, depending on where we're at in a lifecycle of a product, and what it is we're trying to protect or throttle. FMS is a slow an laborious process. It hinders industry from capitalizing on market opportunities. The more we can change the paradigm and partner with the government side to do more [direct sales], the more they will benefit long term because they get the volume to drive down prices, and allow us to recoup funds to invests in future technology. But there are challenges, because each branches has organizations that support foreign military sales. There's a balance.

As more and more countries seek indigenous capacities as well as a return on defense investments domestically, has the nature of partnership changed?

Part of partnering with some of these countries involves offset requirements. Often as we start to partner with indigenous capable industries, it used to be ok to [offer up] basic machining. But there is more pull for being able to put high levels of noble work into these countries. Some are more advanced in capabilities, and as we look to partner, how to do we strike that balance, leveraging some technology they may bring to bear, with what we're trying to keep domestically and protected? It's an interesting paradigm. And a tipping point with how U.S. industry deals with going international.

https://www.defensenews.com/digital-show-dailies/eurosatory/2018/06/12/as-european-defense-evolves-heres-how-industry-is-responding/