Europe’s industrial base faces urgent call to accelerate readiness

We'll just go with a top of mind, at least for me, a news item we woke up to this morning

Some may have seen it. Poland this morning just saying that they shot down Russian drones that

entered airspace. These are the sorts of headlines that maybe if you're a casual consumer of the news

you see from time to time and you don't quite have the appropriate context to know what to do

with that bit of news. But I'm curious from you experts, as you see another headline like that

just a few hours before we take the stage, how do you think about it? And how do you think

the average citizen should think about or approach that sort of story

There's a couple of points. I just want to pick up on something that was said earlier

And I think coming to the investment side in Europe, if we think of the largest spender in

Europe, potentially, which is Germany, they have a lot of money and they just don't know how to

burn it fast enough. So they've got plenty of money. And of course, when you talk to what should

we be doing next, the foot, I think releasing our minds from the fact that these individual

countries are individual and they will protect their interests. They will protect their life

Europe isn't a place. It's a construct of multiple countries with national interests. So that's

number one. The threat that we talk about now is really, I think, a sharp reminder that we have to

act faster. We have to team faster because it's just on our doorstep. And that's one thing you do

notice. The further west you move, the slower things go. The further east you move, you move

really fast decision ties and we've got to learn that in our procurement in our planning in our

operational readiness in how we develop products think of the east and what threats they're sick

what are they thinking today in poland right what are they thinking today yeah anyone else

and it and i i i think as well you know what it just says to me is that i think it's going to put

more of an emphasis the focus on all the things we've been saying collaboration how do we go

quicker. How do we get better capability? Because that's one example. And now it's becoming real

I think that probably in the past, maybe the public could see that there was something in

Ukraine. Now this is becoming much wider spread potentially. And I think it's a very real thing

And I think that if anything, the way I look at it is this is where we need to accelerate

How do we accelerate is the answer here. And I think we all mentioned about collaboration

That's great. But what does that really mean? Because governments can do certain things

primes can do certain things but i i believe strongly that there's a need to really collaborate

at the level it is because that i think is where you get the the speed i think that's really where

you get the agility and such like and that's where you get the technology so i think that

we really need to think about it in a very different way it can't all just be the government's

you know with the responsibility i think it's the whole industry and this is all about the

industrial base and how do we kind of build it up and i think that that's uh it's a holistic view

that really goes all the way as deep as necessary. So in answer to your question, I think it's just going to put an even keener focus

once we saw what happened yesterday. Yeah. Lieutenant Colonel Autzen, please. Yeah, sure. Thanks

It's just another wake-up call. It's a wake-up call, and I'll kind of dovetail a lot of comments that were made here

You mentioned sovereign IP and countries, and that's actually one of the barriers

That's a barrier right now for industry. If industry thinks that, for example, if they produce something for a given state in Europe and that they're going to have a challenge then selling that to another state, that's a barrier for industry that will then limit us growing our European industrial base

So that is a problem. And to your point, this is not just, you know, it's not just government

It's not just military. This is it's a societal thing to understand

You know, there's a there's a decision to be made amongst the allied industrial base in Europe

You know, do we do we need to be on? I'm not going to answer this, but do we need to do we need to be on a wartime footing

If so, does that mean that our that our government should maybe more more transparent with society on the status of things

You know, I think the general public might find that if they really knew the readiness levels of their militaries and their ministries of defense, they probably wouldn't be as happy

And so there's a balance, though. And I understand I'm not a politician, but I do wonder that sometimes

If you pull the curtain back, maybe the voters will be a little more in favor of more defense spending because we do see the threat, like you mentioned in the news this morning

I think you'd be a good politician, by the way, for whatever it's worth, if you ever want to make a right for office

Trevor, go ahead. I just think I just would make two. I find the news, you mentioned alarming, because there are two possible explanations

One is that the incursion was deliberate and they were pushing about us, and that is alarming

The other is that it was not deliberate, that it was some kind of accidental

which shows poor command and control in Russia. Yeah. And both of those, whichever explanation you think is prominent

then both of them are worrying because the risk of accidental escalation from unintended actions is really something we have to think about

So I find it alarming. It is another wake up call. But there isn't any comfortable explanation as to why it happened

If I could just riff on that a little bit, Trevor, that you mentioned just now, those points, I totally agree with you

I mean, I think we've seen more incidents like this. I tend to sort of sound paranoid, but I, you know, I tend to think it's probably not accidental. Mr. Putin's regime is just trying each time to have a little look at how far can I push this

If it is a command and control error on the part of Russia, that is alarming

But I would also argue that potentially opens up opportunities for us as NATO, because a command and control failing by one party or by one belligerent is an opportunity for the other belligerent to work out that's a weakness

How can we exploit it? How can we use that as a center of gravity

One thing I've noticed, I spent a lot of time up in Baltic and very close to the southern border

the Russian border in South Estonia, and the feeling there is palpable

And people don't say if there's a war with Russia. They say when the war with Russia comes

There is almost an acceptance of an inevitability of it. And I would agree with what all of you were mentioning in your own way

that what you actually need is a whole of society approach to this

You know, it's not just a case of we'll do this and do that. And an industrial policy, industrial strategy is a maneuver element in its own right

It's a war winning weapon in its own right. And that's something I'd be keen to articulate to voters

Yeah. I'm curious from each of you gentlemen, if you're comfortable, if you had to give a grade A through F of Europe's current readiness, what grade would you give it

And I'll leave that open to whoever wants to take that first, if anyone wants to take that first

Well, it's a question of readiness for what. Yeah. Sure. And I think, I mean, there's a psychological position as well

So I'm pretty much in the C area, but it's trending upwards

But whether it's trending upwards fast enough and more thoroughly enough, I've got some doubts

the financial questions about defense are they're colored by the overall financial conditions of the country

I think Rachel Reeves is speaking here later today. And in the Cold War, we spent much more on defense

and our economy continued to grow. It doesn say that defense will boost the economy necessarily it doesn prevent growth And we need to get that sort of back into the equation in some way But I would give you the C I go C minus

The reason I say that is I've spent some time in and around Europe looking at the readiness, not only of people, but of fleets of vehicles

I was in one large MOD not that long back and they said we've got a massive fleet of armored vehicles, but only 20% is ready to move

think about that and so part of the mission that my particular company is on is raising that

readiness is it 95 availability and you take the uh the f-35 platform that's not fully readily

available take any platform you like across europe there's a lot of work to do to be ready to to do

that unquestionable next step but we could be a d quite quickly it could be a b quite quickly

I think we have, you know, must try harder. All right, fair enough

That's a good point on readiness, and I think we should include on that personnel readiness

Correct. Because if you look at actually, you know, the strength of your forces, number of troops, sailors

Marines, airmen, et cetera, there is a readiness level to those as well, and I think we'd be surprised sometimes to see

how those readiness levels look. Sometimes not nearly as good as you think. You know, who's on holiday, who's on leave

medical, whatnot, still in training. They're not ready and they don't count in the books. I'm not in a position to where I'm going to grade another country's military on how they're doing

because also it's subjective to what is the threat against that was mentioned

I will say that it's trending positively. We are making slow strides

I think the increase in budgets, the increase of industry engagement, the increase of capital engagement

like we're making progress. I would like to make faster progress. I'm a Marine of a pilot

I like to go fast. We'll see. Fair enough. I mean, for me, I think it depends what you call Europe

because I think the parts of Europe, I think, are very ready. I think if you..

Steve made a great point earlier. The further east you go, the more ready people are

because the threat is more imminent. The further west you go, then it feels less of an urgent thing

So I think if you look at, say, some of the Scandinavia area

and places like that, I'd say that they are extremely ready. If you look at Europe as a whole, we work across pretty well every single country in Europe, and there's a wide variety of capability and readiness and things like that

And I think, to me, that's an area that we need to really focus on. Okay, great

Only if you like. I would, yeah, sort of, I think, on readiness to absorb an initial Russian attack in the Baltic, I put it as about a B-

I mean, if you look at, again, going back to Estonia, the other side of that border, you've got the Russian city of Skob and you've got a lot of Russian airborne units that are based there

Now, Russia keeps its airborne troops as a separate service and they're considered the crack groups of the Russian Federation

But I would not want to be Russian airborne forces going up against the battle groups we've got there, UK led battle groups, the French ones, German ones, etc

i think our fighting readiness and our deployments there are excellent what worries me is how quickly

can we reinforce those we're back almost to the folder gap scenario yeah we know that we've got

the three days to halt the soviet shock army and to try and keep them in place and slow them down

but then we depend not just on the us but elsewhere in europe about getting those troops to the

front line very very quickly and that's where i'm i'm more d minus territory yeah i just pick up on

this point made really well about the people readiness because uh we've got fleets of vehicles

perhaps ready and ships and whatever platform you like we don't have the trained people yet coming

through we could sustain one or two bouts after that where are the people well to your point though

so when i answered the question i didn't put in the calculus the us as well i was Asian justice

Europe. And I think that's a good distinction. Right. Absolutely. You know, if

things went really bad in the world, for example, and my country, unfortunately, was

tied up in a different theater, then how well could Europe do

And I think that's what we need to be prepared for because factually

we've all reduced our defense budgets over the years. The U.S. was at 6% GDP once by a time

and now it's just, I think, just over 3% GDP. So yeah

we're trending positively, but we need not stop. It needs to continue to trend positively. I appreciate that

Yeah. Well, I would like to add in the resource question, because if you

ask a sort of simple question about in resource terms, should Europe be able to deter Russia

then the answer is pretty clear. We ought to be able to do that, certainly. I would leave aside the nuclear piece, but the conventional piece

I mean, in terms of total GDP, GDP per capita, high technology expertise, where you stand on the corruption index, all those sorts of things, Russia is a backward state

So if we can't, if sort of our current military can tell us we can't deter Russia, just Britain, France and Germany together have got many more resources

You know, there's a bit of me that says, OK, you're going to need a transition. But if you can't deter Russia, let's get somebody who knows, got some idea how to do it

Because in resource terms, we certainly ought to be able to do it. There is no comparison

Russia is a very backward state. For sure. Thank you, gentlemen. As a reminder, if you're in the audience, and thank you for coming out this morning

Everyone's caffeinated and excited. You can scan the QR code, send our distinguished panelists your questions

Speaking of, we've already got a few of them, so I'll kick one out. We'll go from a bit of a focus maybe on the eastern side of Europe to a bit up north

Michael Harding asks, what are your views on the alliance of northern nations to protect Arctic sovereignty

What does that look like in terms of the border? It's an issue to some degree being litigated back where I come from in the United States

an increased interest, of course, from the incumbent administration on Greenland, access to the Arctic Circle

What does defense and readiness for Europe look like in that theater, so to speak, of the conversation

I don't think I got the whole question. I am not caffeinated this morning. I'm just going right into it

I can just say on a personal note, I am absolutely ecstatic to have Sweden and Finland join the NATO alliance

I have quite a lot of time working with the Finnish, and I've loved every moment of it

It's a fantastic professional military organization and quite a robust reserve force as well

and there's no one I'd rather have eyesight on that front than the finish

That's terrific. Thank you. I can kind of talk from, we do a lot of work in that part of the world

and I think that the state of readiness and I think the capability there is exceptional

I think that they really reacted extremely quickly. I think that they're really driving the right way

and they are working in a true alliance. So I think that's in a pretty good shape

if I look at that in comparison to other parts of Europe maybe. So I think it's a pretty good state

the balance between focusing on the Baltic and controlling the Baltic and then the Arctic

it used to defend itself because it was isolated and now we're in a condition

where suddenly it's potentially a highway and whether it would be used

for commercial purposes I mean commercially the people that were really interested in it are Chinese and And whether it necessary that we have some dominant military power that controls it or whether there is some agreement that it the high seas and there shouldn be you know anybody that that an open area

I'm not qualified to speak about it, but I do know in terms of balance of effort, I think there's, you know, the extent to which northern European countries think they have to devote naval resources to the Arctic and the extent to which they focus on the Baltic

That's a question that it's a policy question first for them and then the industrial consequences will follow

One thing I'd just like to bring in about the Arctic is as an operating environment

one of the things we have to think about I mean I'm going back to my hobby horse here

of the electromagnetic spectrum but fighting in the spectrum in that part of the world can be difficult

because of where you are you start getting things like the ionosphere

which we depend on for high frequency communications starts doing very strange things, satellite communications

believe it or not is not as comprehensive as it should be

in that part of the world previous years we very much focused

to having, understandably, a global coverage of, for example, for military cycle

But one of the things we've done is we've often admitted the polls because there was no real reason to have a lot of coverage up there

That is changing. The US, for instance, is boring investment into satellite communications in the Arctic

We've got the Canadians who are doing some interesting things. We're looking over the horizon radar in the Arctic

So to be able to see the threat before it appears on the horizon. but we need to be aware that this spectrum can be a difficult resource to fight through

in that part of the world. So we need to think about what we're going to do about that, whether that's a spectrum-led approach or whether that's more conventional

I mean, it sounds very boring, very old-fashioned here, paper maps and compasses and grease pencils, that kind of thing

Yeah, of course, we have another great question that a member of the audience just submitted, and I'm fascinated in this one

As we have this robust conversation on military readiness, a question about our political readiness

Maybe it's about political will a bit more. Do we currently have the political will across Europe that is prepared to respond to the threats at play

I see a head shake at the end. I'm going to put you on the spot. I couldn't help but notice that

I mean, personally, I think in some parts of Europe, yes. And as we've been speaking on the panel about just now, there is, you know, certainly in the north of Europe, there is a very keen awareness of the threat

You do see more of a whole-of-society approach in places like Sweden, Finland, the Baltic, etc

If it goes up, we're all going to be involved. But I think in other parts of Europe, that's not the case

I think in other parts of Europe, and in other parts of policies, there is a keenness to avoid conflict

Part of that, I think, is driven to an extent by Afghan and Iraq and our experiences in those states

But we mustn't count Russian disinformation, hybrid warfare approaches that if you have, for instance, where I live in France, there's some very strong voices against involvement in Ukraine

But you have to look at who is propelling those voices, you know, who's propelling those arguments

So I think that's. If you don't mind me asking, you mean who's propelling those political arguments within the country

Absolutely. I mean, I'm not I'm not trying to say sort of Russia's behind everything, but I'm saying there are resources there to help amplify

viewpoints that may be saying, let's have less defence spending or whatever it might be

And as an add-on to that, I think the challenge we face in Europe is that in

many ways you can't have more defence spending at the expense of something else

People understandably will still want healthcare, education provision and pensions, whatever it is

So that's why, as you were all saying earlier on, you have to get imaginative

about how you spend the money. You have to get collaborative. And that's, I think, how

you can sort of square that circuit. Yeah, I mean, in the UK

the government has sort of accepted that the way to, if you like, popularise but make acceptable more defence spending is to emphasise its economic benefits and its economic benefits across the country, including the less well-endowed parts of the economy

and it's pushing that. I mean, in the UK, there is an acceptance

It's almost where you look in government. There's a readiness to spend more in the Ministry of Defence

and press for that and amongst our defence ministers. But there's words of caution coming from the Treasury

and other parts of government. But, you know, I mean, I think there is the spending for Ukraine

for instance, which I think is about £3 billion, £3.5 billion a year

which is a chunk of the defence budget. That's unquestioned. That's not debated at all

Yeah, I think the political will is a great question when you look at these arm's length conflicts

where you can field your capabilities through a third party. It's quite interesting

As committing your own resources, I think that's something else. And I think the political will is not consistent across Europe

I have quite a deep, strong view about that, that it is very strong

Maybe up north, there's quite a cohesive view. The further east you go, there's a cohesive view

Maybe these border states, border countries, Turkey, for example, they'll think differently because they ride the east and the west

I think one thing to come back to as well is thinking of what might propel that cohesiveness

this is that China is involved supporting Russia, perhaps with technologies that are

eye-wateringly available. Yeah. And we must not ever lose sight of that

Yeah, that is one of the, I felt with China and Russia and the Ukraine conflict, China

does not want the Russians to lose. Correct. But it does not want the Russians to win either

And that's a judgment call from what you observe. But when you think of the long-term implications, it's a big question

The only thing I would like to add is, it goes back to what we were saying right at the beginning

it's about the speed element. Because I think that the longer that this goes on, then the political will or the public support

I think, is only going to probably deteriorate because people get a little bit fatigued

when things are going on, like the time I lived in France. and it's palpable

You can see the way that that's declined. So I think this is about industry striking pretty quickly

and really try to make the most of the opportunity that we have. Exactly as Trevor said

I think the smart way is to make this a benefit to the business

to the economy, and to really do it in that way. Otherwise, I think there's going to be some challenges

Sure. I have a personal question for Lieutenant Colonel Oten that has been submitted for you, sir

What is your advice to U.S.-based defense companies with a current manufacturing presence in Europe to accelerate and better support European countries

I'll start with the lieutenant colonel, if anyone else has thoughts after that. Well, if they're that far, they're already doing a fantastic job

So I'd have to try and think about doing that beyond. I don't know

I mean, if you already have a manufacturing facility, it depends. Is that defense industry, that defense company, actually working with European militaries and actually selling and getting on contracts

Outside of that definitely partnering with industry And I think that one trend that we all going to want to see moving forward I think we saw that in the U defense industrial policy that came out two days ago about actually having partnerships between industry in different countries and being able to share that technology

It also streamlines the issues sometimes you have with IP, sometimes the issues you have with trade, and that works out

I think, in the overall scheme of things, open markets amongst allies is one of the most important things we can do to rearm the defense investor base

We all agree that some level of autarky is not going to get us where we need to get. We need to share the technology

An example I give on that, for example, is if there's a great company in the U.K. that's making some great technology and the Ministry of Defense is not ready to procure it

and the U.S. can procure that technology and keep that company afloat and get them across the valley

that's absolutely fantastic and when we do that collectively we're going to be stronger so i do

get scared sometimes when people say oh you know sovereign technology there's a time and place

there's certain technologies of course you want to have but you can't get too far into it and we

haven't talked about it is leveraging commercial technology is absolutely huge which is why i'm

here you know 75 of the r&d spend in the u.s is commercial about 60 of the r&d spend in europe is

commercial going on the days where the government labs are making the best and the government schools

are making the best. You have to leverage private or outside academia. You have to leverage

outside commercial technology and actually prototype innovate that to get us there

You've got to expand the defense industrial base collectively across everyone. We have

to lower barriers to entry. There's policy things we can do back to the political side

of the house. We saw it. It has happened somewhat between the US, Australia, and UK when we

reduced some of our export controls, but we needed to do that. We need to do more of that

So anyway, kind of a segue for the question. I'd love to talk to you after the panel if you're in the audience who asked the question on that

because I do have some further thoughts, but again, I know we're short on time. No, no, I appreciate it

I got follow-ups for you after the panel. That was a great answer. And CB, it looked like you wanted to pop in

You're welcome to do so. Yeah, I did because I think everything's good, what's just been said, and I can only concur

But the issue becomes, for some people, defense is a jobs program

which means if I can't manufacture in your country, If you want manufacturing in my country, I'm not interested in your IP

So good idea. Great. Put that in a box. Exporting it. Great

But I want to make the jobs here, which becomes another barrier

And that happens in intra-Europe as well. We all know that each nation state wants to benefit from the benefits of defense, which is a rich jobs program

And collaboration between industry. It's not happening yet. You mentioned VW and Rundt

That's a great example. It's got to get more of that, much more, and between a company, UK, PLC Limited, and the US

rather than it all must be made here. But just think about how many of those companies were making technology almost 80 years ago

and they don't anymore. That's right. And they have some of the best machinists, best engineers, best designers in the world

and it's just this untapped resource that we need. I'm with you. Sure. And then I think just kind of on the back of that one

I mean, there is technology available. You made a great point about IP and holding on technology

But, you know, OK, we're a global company. There is based in the USA, but there's a lot of kind of global technology

which is there that people think, ah, that's going to be unexplorable. And it's just not true because a lot of it is based on commercial technology

So there's nothing really that stop us from kind of taking that

and then modifying it in the right way that our country is over here in need. to be able to do that

And I think that that's the point. It's probably kind of breaking some of these myths

about what is really achievable and what isn't. And I think that, you know, maybe that's education

or maybe it's, but this is really what I was kind of saying. I think that there's a role to play

the lower tiers in the business where it can really kind of accelerate this

and bring it to the market, but still preserve all the good skills

and things that we have over in Europe. We have just a few minutes. I'm just gonna try and grab it a little bit

of a lightning round here at the end if possible, gentlemen and you don't all have to answer but if you have an answer are

you're welcome to add it what would you say is the single most important investment that Europe must make in the next five years? Spectrum superiority

I'm sorry? Electromagnetic spectrum superiority. Oh that's exactly what I figured you were going to say. I had that perfectly nailed. Anyone else

I'm into that. I suppose I would say that I would qualify the assumption that we're going to have multi-domain capability

Because if we have superiority, it might just be, it's always going to be temporary

It's going to be unlikely to be permanent. But I think, as I said early on, I think the ability to survey from space better in Europe

and then the ability to have the sort of air defence capability

that means the sort of casual, if I call it that, but the casual sort of incidences that we had yesterday in Poland

and to take those out of the equation would be extremely useful. I'm going to say what they said, that's what they're going to say

And let's not forget, Europe has made some fantastic investments up to now

in platforms and people and projects. It's really good. But let's get it ready to deploy

That the right equipment is at the right place at the right time and that it works

I think that is really critical because we've already got a lot of investment

So in the next quick few years, we can do that now. We can do that now with great tools

Okay. In addition to what they're about to say. Of course. Do you want to go last

You want to go? Okay, for me, I'll keep it really short

I think leading edge interoperable air and missile defense systems. Yeah. Initially in my head, I was going to say you can't go wrong with MASH or triple autonomous systems across all domains, including space, and the ability to counter them

but the thing I always like to try and remind or remember is that

oftentimes conflict can be looked at in my view who commands the most resources

and that's personnel, equipment, and money and so you have to balance those things

so expensive, exquisite systems at the expense of other resources or the personnel

if there's just an equation that's got to get worked out Alright, I've got one minute left so ten seconds from each of you

if possible in as few words as possible What does success look like for Europe's industrial base by the year 2030

Persistent strategic, operational and tactical overmatch over Russia. Right. An ability to deter with confidence what Russia could throw at us

Yeah, I'd say exactly the same. I think it's literally the ability to be totally autonomous and to be able to stand on our own two feet as a European region

Concur with all. add interoperability throughout the continent. Agile, forward thinking, and barriers have now been broken down

All right. Agile and forward thinking is how I would describe all five of you gentlemen. Thank you very much for taking the time to be on stage with us today

One big hand here for our panelists to kick off this morning's broadcast

I feel I'm in breaking newsroom right now in broadcast mode. And a very special thank you to all of you

Enjoy the rest of your conference, and we will see you again soon. Thank you, gentlemen. Thank you