Saab to double ammunition production

Saab president and chief executive Micael Johansson on Thursday said an EU plan to produce one million artillery shells a year was “realistic”, thanks in part to efforts made by the Swedish defence manufacturer to boost production.

Saab doubled its ammunitions production capacity before the war in Ukraine and is doubling it again, said Mr Johansson, speaking at a Brussels defence and security conference.

The company expects sales growth of 15 per cent this year as orders increase. Rising geopolitical tensions mean European countries are keen to restock their defence capacities after decades of peace.

Mr Johansson said his company alone would be able to produce 400,000 artillery rounds a year by early 2025.

“I think we have a fantastic defence industry in Europe,” he said. “It’s just that we need to collaborate a bit more, create ecosystems to be more sovereign within the EU and Europe.”

Speaking at the same forum, which was supported by the European Commission and the Belgian government, the bloc’s foreign and security chief Josep Borrell said the 27 member states would spend €70 billion ($76.5 billion) on increasing their defence capacities over the next three years.

“It’s quite a lot,” he said.

European politicians have expressed doubts about the bloc’s capacity to step up production quickly.

German MEP Christian Gahler has said that Europe's capacity was 300,000 shells a year. European Commission officials have declined to publicise the figure due to security concerns.

EU officials say they are responding to Ukraine's request for help as fast as they can, with joint-procurement plans to boost ammunition transfer to Ukraine at a cost of €1 billion and more recently, a proposal to use €500 million from the EU budget to increase ammunition production within the bloc.

Yet Mr Johansson said the EU was still lacking “real governance” and needed an authority that would be responsible for acquiring weapons. “We are working every day with [increased] capacity but how to access these projects is still a little uncertain,” he said.

Mr Johansson also criticised Europe’s continued reliance on the US in the defence sector and called for countries to raise their military spending goals from 2 per cent of GDP to 3 per cent of GDP.

Few members of the alliance achieve that goal but Nato is expected to raise that figure at a heads-of-government summit in Lithuania in July.

“There’s huge capacity for growth in some countries,” said Mr Johansson.

Europe has so far committed €16 billion of military support for Ukraine, according to Mr Borrell, through institutions in the bloc and on a bilateral basis. The US has committed $36.9 billion.

Mr Johansson recognised it was a sensitive time to highlight flaws in relations between the EU-US, historic allies that have rallied behind Ukraine to help it fend off Russia's invasion.

“I will put my neck out here but we are too dependent as the EU on the transatlantic link,” he said.

“If you look at the past four or five years, 60 per cent of defence capabilities and produce came from the US into Europe.”

Mr Borrell echoed Mr Johansson’s views, saying: “I was not a fan of [former US] President [Donald] Trump, but I think he was right on one thing: Europeans don’t share their part of the burden."

The US is also the number one contributor to Nato funds.

“Certainly, everybody prefers butter to cannons,” said Mr Borrell. “But sometimes if you don’t have cannons, you don’t have butter.”

Mr Borrell also addressed tense EU-China relations, which have recently come under intense scrutiny over a visit to France, Germany, the Netherlands and Norway by Chinese Foreign Minister Qin Gang.

China has sought to present itself as neutral in the Russia-Ukraine conflict, but Mr Borrell described Beijing's position as “pro-Russian neutrality”.

The EU must make diplomatic efforts to “not to push Russia in hands of China, and to ask China to use their influence to stop the war”, he said.