As defence contractors gather at Britain's Farnborough Airshow this week to capitalise on Europe's military spending boom, American manufacturers of military goods appear to be shifting focus to produce more weapons on European soil.
European governments are seeking greater control over defence equipment, more local production and a larger share of industrial benefits.
In response, US arms makers are expanding manufacturing in Europe, forming joint ventures and offering more tailored products.
"We hear loud and clear: Europeans want more sovereignty, and they want more localised capability," said Daniel Tenney, Lockheed Martin's senior vice president for global business development and strategy.
With NATO's European members and Canada sharply increasing defence spending, US companies argue it is faster and cheaper to buy proven American systems than develop new ones, while pledging to localise production and technology.
Europeans urge localisation
At Farnborough, Lockheed Martin unveiled a lower-cost Patriot interceptor to be developed with European and US partners.
The announcement follows plans to produce the Army Tactical Missile System (ATACMS) with Germany's Rheinmetall.
RTX's Raytheon has also partnered with European firms to expand Stinger missile production, including assembly in the Netherlands.
Countries using systems such as the Patriot benefit from shared investment in capabilities like threat databases, said Thomas Laliberty, president of Raytheon's land and air defence systems.
"They get a lot of benefit from that collective," he said.
US defence technology firms are making their presence felt in Europe. California-based Anduril, exhibiting at Farnborough for the first time, has expanded its UK workforce and agreed to establish local production of its Barracuda-500M cruise missile in Poland.
"Each government has a different localisation need," said Anduril UK General Manager Richard Drake.
Push for greater autonomy
Many European governments worry the US could become less willing or able to provide weapons, spare parts or other support in the future, particularly if American defence companies are forced to prioritise US military requirements elsewhere.
Industry executives and analysts say European countries increasingly want access to the underlying technology needed to build, modify and maintain equipment themselves, rather than simply buying finished products.
"They want a significant IP transfer," said Fabio Dal Pan, a Milan-based senior partner at Boston Consulting Group.
While Europe remains heavily dependent on the US defence industry, analysts say a long-term shift towards greater autonomy would pose a significant challenge for American suppliers.
That prospect is "of huge concern," said Tom Waldwyn of the UK-based International Institute for Strategic Studies.
Some capabilities, including F-35 fighter jets and Patriot air defence systems, cannot be easily replaced. But in other areas, European alternatives are becoming increasingly viable.
"There are European capabilities that may well be good enough," said Sash Tusa, an aerospace and defence analyst at UK-based Agency Partners, pointing to medium-range air defence systems that also offer greater sovereignty and, in some cases, lower costs.
Europe invest in domestic technologies
Europe is already reducing its dependence on US suppliers in certain sectors.
NATO recently announced a roughly $4.5 billion plan to buy up to 10 Saab GlobalEye surveillance aircraft, choosing the Swedish system over a rival offering from Boeing to replace ageing AWACS early warning planes.
European countries are also investing in homegrown technologies.
At Farnborough, BAE Systems unveiled a new unmanned fighter jet that Britain said it will use as an operational concept demonstrator, despite several US companies already developing similar aircraft.
The programme will involve multiple suppliers but remain "sovereign," Air Vice-Marshal Jim Beck, the UK Royal Air Force's director of capability and programmes, told Reuters.
"We need the right to do what we want with our kit at the point of our choosing," he said.
