Norwegian Defense Companies Hope to Benefit From F-35 Program Deals

HELSINKI — Norway’s leading defense companies hope the dividend from expected subcontracts of the Lockheed Martin F-35 acquisition program will be of a magnitude to stimulate growth within the indigenous sector and grow exports to the US and globally.

Despite scaled-up investments among leading industry groups, Norway saw a 20 percent drop in defense exports in 2016. In monetary terms, exports in 2016 amounted to $224.1 million. This was $57.2 million less than the 2015 total. 

With the exception of a standout year in 2015, Norway ’s international sales of defense equipment has been in decline since 2009 when the value of exports reached $366 million. The most significant decrease in exports, in 2016, was visible in foreign sales of missiles, mines, mortars and grenades.

The United States remains a key market for Norway ’s defense equipment exporters, and the US  market accounted for a full 40 percent of the country’s total foreign sales in 2016. NATO-member states accounted for 70 percent of Norway ’s total exports in 2016.

The importance of the US  market to Norway was underlined by Øystein Bø, the state secretary at the Ministry of Defence, when he advocated a higher role and contribution by Norwegian suppliers in the US Defense Department’s so-called third offset strategy.

“An important success criterion for the third offset is fostering a culture of innovation. In Norway, we have been able to do this by establishing close interaction between our armed forces, the defense industry, and the defense [research and development] community,” Bø said at an October event in Washington hosted by the Center for Strategic and International Studies.

Bø described Norway ’s defense industry as “relatively small but highly innovative,” with niche sector companies capable of delivering advanced, cutting-edge military technologies.

Norway ’s two largest defense companies, Kongsberg and Nammo, are hoping to realize subcontracting gains from Norway ’s F-35 Lightning II acquisition program and use this platform to raise their manufacturing profiles and bolster sales globally.

Kongsberg produces the Naval Strike Missile (NSM) and HUGIN autonomous underwater vehicle. NAMMO manufactures rocket motors for Raytheon’s Evolved Seasparrow Missile and its Advanced Medium-Range Air-to-Air Missile as well as Diehl Defence’s IRIS-T missile.

In December, Kongsberg’s Joint Strike Missile (JSM) completed a successful long-range flight test launched from an F-16 operating from Edwards Air Force Base in California. The missile was launched over the Utah Test and Training Range west of Salt Lake City.

Under development for the Norwegian Armed Forces, the JSM is scheduled to complete the qualification program stage in 2018, said Eirik Lie, president of Kongsberg Defense Systems.

“The test verified all intended goals, completing another milestone towards full integration on the F-35. The JSM program is on track to provide the fighter with a long-range, precision-strike, anti-ship and land attack capability,” Lie said.

Kongsberg’s advanced missile supplier reputation in the US  has been enhanced by a contract awarded to Raytheon that will see the company produce the NSM. The deal paves the way for commercial-scale manufacturing of the Norwegian-developed weapon system.

This NSM contract is regarded as an important next step in the long-term partnership between Kongsberg and Raytheon. It represents a first production contract for NSM in the United States . Kongsberg is forecasting significant gains from follow-on contracts in the US  and potentially among other NATO countries.

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