Through a combination of organic growth, direct sales, partnering and acquisitions, Sweden’s Saab plans to significantly expand its presence in the United States, capitalizing on the world’s largest market for defense and security spending, the company’s U.S. chief said.
Saab currently has 300 employees in the United States, mainly spread among a small headquarters office in Washington, D.C., that opened about a year ago, and several business operations, including a camouflage systems business in North Carolina, a simulation and training systems business in Florida, and support services and civil aircraft leasing businesses in Virginia.
Overall, Saab does about $300 million of business in the United States, which includes direct sales from Saab’s business operations overseas, Dan-Ake Enstedt, president of Saab North America, told sister publication Defense Daily.
By 2015, at the latest the goal is to build Saab’s employee base in the United States to between 1,000 and 1,500, Enstedt said.
To get there, Enstedt said that one of the pillars will be to continue selling products from Sweden in the United States and also to grow existing U.S. operations organically. As pressure mounts on U.S. defense budgets, he believes that interest will grow from customers here for existing solutions made by foreign companies like Saab that may meet most of a mission need but without having to sink a lot of costly development spending into developing a system that fully meets all requirements.
A second component to Saab’s growth strategy here is forming partnerships with U.S. firms, which the company is already doing. The company already has a marketing agreement with Sensis Corp., which will sell Saab’s GIRAFFE multi-role radar in the United States and for foreign military sales customers. The company is on the Austal/General Dynamics [GD] team building Littoral Combat Ships for the U.S. Navy. Saab also is a supplier to Alliant Techsystems [ATK] on an active defense system.
Enstedt said that U.S. firms have an incentive to partner with foreign companies doing business here because they can leverage those relationships to begin to expand their own international business as spending for U.S. defense systems declines.
Saab North America is still crafting its acquisition strategy but Enstedt pointed to four areas for targets. Sensors such as radar systems, active protection systems, training solutions and homeland security are areas that are synergistic with Saab’s existing capabilities, he said.
In the homeland security area, Saab makes command and control systems used in Sweden and other countries for airport security management, harbor surveillance, prisons, critical infrastructure protection and for police and fire personnel. The company has also developed the Skeldar unmanned aerial vehicle for use by naval and land forces and believes it will also have civil and homeland security applications.
Saab is a $4 billion aerospace and defense company and possibly best known for developing and producing the Gripen fighter aircraft. The company has a wide range of other defense products, ranging from radar and combat management systems, to anti-tank missiles, communications systems and force protection systems.
Enstedt said that 20 years ago Saab did between 80 and 85 percent of its business in Sweden, whereas now about 80 percent of its revenues are generated in international markets. However, it’s only within the past year that the company has begun to sharpen its focus on the U.S. market, he said.