How allies are investing in the US defense industrial base

1. Tresa Gennov: The Strategic Imperative of Allied Investment

Timestamp: 00:10:11 to 00:10:49 - watch this moment on skim

The 2026 National Defense Strategy emphasizes leveraging allied and partner production to meet US requirements. This necessitates allies acting not just as consumers but as co-investors and co-producers to advance shared security interests, ultimately shaping the speed at which the US can scale production when critical.

Significance (High): This strategic shift redefines international defense cooperation, moving beyond traditional alliances to a more integrated industrial partnership. It signals a proactive approach to bolstering defense capabilities through shared resources and manufacturing.

Sources in support: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program), Mike Coulter (President and Chief Executive Officer, Hanwha Defense US), Heather Armen Trout (President and General Manager, Kongsberg US), Eric Hillmer (Vice President of Growth, Helsing Inc.)

2. Mike Coulter: Hanwha's Re-Industrialization of Philly Shipyard

Timestamp: 00:17:01 to 00:18:49 - watch this moment on skim

Hanwha Defense US acquired Philly Shipyard with the intent to re-industrialize it using Korean technology and know-how. Significant investments, totaling $350 million already and a planned $400 million more, are being made to expand its footprint and capabilities, signaling a commitment to bolstering US shipbuilding capacity.

Significance (High): This move directly addresses the need for increased domestic shipbuilding capacity, leveraging foreign expertise to revitalize a key industrial asset. It exemplifies the co-investment strategy discussed, aiming to enhance US defense readiness.

Sources in support: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program), Heather Armen Trout (President and General Manager, Kongsberg US), Eric Hillmer (Vice President of Growth, Helsing Inc.)

3. Mike Coulter: Hanwha's Munitions Production and US Challenges

Timestamp: 00:18:36 to 00:19:12 - watch this moment on skim

Hanwha possesses the capability to produce artillery and munitions at an 'eyewatering rate' in Korea, with systems actively used in Europe and the Middle East. The company intends to bring this scaled production capability to the United States to help address existing munitions challenges within the US defense industrial base.

Significance (High): This highlights a critical gap in US munitions supply chains and positions Hanwha as a potential solution provider. Their ability to deliver at scale could significantly impact US and allied readiness in conflict zones.

Sources in support: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program), Heather Armen Trout (President and General Manager, Kongsberg US), Eric Hillmer (Vice President of Growth, Helsing Inc.)

4. Heather Trout: Kongsberg's Pure-Play Defense Strategy

Timestamp: 00:21:54 to 00:23:40 - watch this moment on skim

Following a recent reorganization, Kongsberg has become a pure-play defense and dual-use technology company, split into three divisions. This strategic shift allows them to focus on best-in-class technology across domains from space to seabed, including missile systems and aeros structures, with a growing US presence.

Significance (Medium): This strategic refocusing allows Kongsberg to concentrate its resources and expertise on defense applications, potentially leading to more advanced and integrated solutions. Their commitment to US production, like for the Naval Strike Missile, strengthens allied industrial cooperation.

Sources in support: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program), Mike Coulter (President and Chief Executive Officer, Hanwha Defense US), Eric Hillmer (Vice President of Growth, Helsing Inc.)

5. Heather Trout: Kongsberg's Naval Strike Missile and NASAMS Production

Timestamp: 00:22:54 to 00:24:37 - watch this moment on skim

Kongsberg is producing the Naval Strike Missile and Joint Strike Missile in the US, marking the first multi-year procurement for munitions given to a foreign company. They also co-produce the NASAMS air defense system with Raytheon, a critical asset for protecting airspace and critical infrastructure, with numerous international users.

Significance (High): This demonstrates a successful model of allied technology transfer and co-production within the US, enhancing critical defense capabilities. The widespread adoption of NASAMS underscores its effectiveness and strategic importance.

Sources in support: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program), Mike Coulter (President and Chief Executive Officer, Hanwha Defense US), Eric Hillmer (Vice President of Growth, Helsing Inc.)

6. Eric Hillmer: Helsing's AI-Enabled Hardware and Agile Development

Timestamp: 00:29:11 to 00:31:42 - watch this moment on skim

Helsing focuses on developing AI-enabled hardware systems, believing that software and hardware must be coupled from inception. They emphasize 'production as a warfighting domain,' designing for producibility and affordability, and adopting a 'move fast and break things' philosophy validated by real-world field testing.

Significance (High): This agile, field-centric approach to defense technology development could significantly accelerate the delivery of cutting-edge capabilities to warfighters. It challenges traditional, slower acquisition cycles by prioritizing rapid iteration and affordability.

Sources in support: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program), Mike Coulter (President and Chief Executive Officer, Hanwha Defense US), Heather Armen Trout (President and General Manager, Kongsberg US)

7. Eric Hillmer: Helsing's HX2 Loitering Munition in Ukraine

Timestamp: 00:29:55 to 00:30:34 - watch this moment on skim

Helsing's HX2 loitering munition system, operating in Ukraine, has demonstrated high efficacy (over 80% in combat, over 90% in exercises) and is designed for affordability and rapid iteration. This success validates their philosophy of developing capabilities that are both advanced and field-ready.

Significance (High): The proven effectiveness of the HX2 in a high-intensity conflict zone validates Helsing's approach to AI-enabled defense technology. It showcases the potential for rapid deployment of advanced, cost-effective systems in modern warfare.

Sources in support: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program), Mike Coulter (President and Chief Executive Officer, Hanwha Defense US), Heather Armen Trout (President and General Manager, Kongsberg US)

8. Kongsberg: The US Market's Strategic Allure

Timestamp: 00:35:06 to 00:38:22 - watch this moment on skim

The US defense market is the largest globally, offering significant opportunity. For Kongsberg, investing in the US aligns with its strategy of selling only to allied partners, enabling economies of scale by developing systems that address multiple allied needs. Contributing to the alliance is paramount, especially given Norway's support for Ukraine and its long-standing partnership with the US. Operating under a mitigated legal structure is a form of foreign direct investment, allowing for tailored production and leveraging Foreign Military Sales (FMS) tails for US programs of record. Creating US jobs also builds crucial advocacy on Capitol Hill, reinforcing the necessity of allies to tackle global challenges like confronting China and Russia.

Significance (High): This strategic positioning allows Kongsberg to leverage US market access for broader allied defense capabilities, enhancing interoperability and economies of scale. It underscores the symbiotic relationship between allied defense industries and US market demands.

Sources in support: Tresa Gennov (Acting Senior Director and Senior Fellow, Atlantic Council's Scowcroft Center for Strategy and Security)

Neutral sources: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program), Mike Coulter (President and Chief Executive Officer, Hanwha Defense US)

9. Helsing: US as the Nexus of Future Warfare

Timestamp: 00:37:31 to 00:40:32 - watch this moment on skim

Beyond market size, the US is the most consequential defense market for shaping future warfighting concepts and defense policy. For Helsing, being in the US is essential to becoming a global powerhouse in software-defined warfare and defending democracy. By working with the US and the broader NATO community, Helsing can deliver capabilities that enhance cohesiveness and interoperability across allied forces, improving how they fight through greater commonality. This involves not just policy influence but also delivering superior capabilities that necessitate widespread adoption, leading to greater integration within multinational operating pictures.

Significance (High): Helsing's presence in the US is framed as critical for advancing global defense innovation and strengthening democratic alliances through technological integration and shared operational language.

Sources in support: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program)

Neutral sources: Tresa Gennov (Acting Senior Director and Senior Fellow, Atlantic Council's Scowcroft Center for Strategy and Security), Mike Coulter (President and Chief Executive Officer, Hanwha Defense US)

10. Helsing's 'Resilience Factories': Rapid Deployment of Drone Production

Timestamp: 00:40:32 to 00:42:36 - watch this moment on skim

Helsing is investing $50 million in Martinsburg, West Virginia, to establish 'resilience factories' capable of being stood up in approximately three months. These factories will replicate the footprint of their German facility, which can produce up to 2,000 strike drones per month. The initial run in West Virginia will involve 115 drones in one week, manufactured by 10 interns, demonstrating a high degree of design for manufacturability and rapid production capability that Helsing believes surpasses current US offerings for group two systems.

Significance (High): This initiative showcases Helsing's commitment to rapidly scaling drone production within the US, leveraging efficient manufacturing processes and a flexible factory model to meet demand.

Sources in support: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program)

Neutral sources: Tresa Gennov (Acting Senior Director and Senior Fellow, Atlantic Council's Scowcroft Center for Strategy and Security), Mike Coulter (President and Chief Executive Officer, Hanwha Defense US)

11. Hanwha's Strategic Pivot: Re-industrializing the West

Timestamp: 00:41:47 to 00:46:02 - watch this moment on skim

Hanwha's strategic pivot involves leveraging its industrial strength and know-how from Korea to address the lack of industrial capacity in the Western world. Instead of solely focusing on exports, Hanwha aims to become a leading global aerospace and defense company by investing significantly in the US and Europe. This includes replicating its advanced munitions campus in Pine Bluff, Arkansas, creating a duplicate factory to scale production rapidly during conflict. The ambition is to provide sovereign capacity in key regions, recognizing that global leadership requires a strong presence in the largest defense market, the United States.

Significance (High): Hanwha's substantial investments signal a long-term strategy to bolster Western defense industrial capabilities and establish itself as a global leader through strategic replication of its advanced manufacturing assets.

Sources in support: Mike Coulter (President and Chief Executive Officer, Hanwha Defense US)

Neutral sources: Tresa Gennov (Acting Senior Director and Senior Fellow, Atlantic Council's Scowcroft Center for Strategy and Security), Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program)

12. Government's Role: Enabling Investment and Innovation

Timestamp: 00:45:15 to 00:50:40 - watch this moment on skim

Governments play a critical role in fostering defense industrial base investments. Programs like the Department of Defense's IBASS provide crucial funding for companies also investing their own capital, helping to scale investments and onshore more content. States actively compete to attract defense factories due to their job creation potential, with West Virginia offering exceptional support. Navigating regulations like ITAR is essential, and collaboration with government bodies like the State Department and DoD can identify areas for adjustment or clarification, addressing 'catch-22' situations, such as engineers being unable to enter the US to assist with factory setup due to deemed export rules. Furthermore, government procurers should focus on defining the problem rather than dictating solutions to encourage industry innovation and avoid cost overruns.

Significance (High): Effective government engagement, from funding programs to regulatory flexibility and problem-focused procurement, is vital for enabling successful defense industry investments and fostering innovation.

Sources in support: Tresa Gennov (Acting Senior Director and Senior Fellow, Atlantic Council's Scowcroft Center for Strategy and Security)

Neutral sources: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program), Mike Coulter (President and Chief Executive Officer, Hanwha Defense US)

13. Mike: Hanwha's Global Ambition and US Commitment

Timestamp: 00:50:49 to 00:54:30 - watch this moment on skim

Hanwha's ambition is to be a leading global aerospace and defense company, recognizing the current geopolitical climate presents a unique moment to reposition. The company is making significant investments in the US, including a $2.2 billion munitions campus at Pine Bluff, Arkansas, replicating its world-class Korean facility to provide dual-theater capacity. This strategic move acknowledges the necessity of being a leader in the largest defense market, the US, and providing sovereign capacity not only in the US but also in Europe and Australia. Hanwha understands that commitment must be to sovereign capacity, and the US administration and Congress show bipartisan support for innovative approaches and ready products, understanding the need for a viable business case on the back end.

Significance (High): Hanwha's aggressive investment strategy in the US and globally signals a long-term commitment to becoming a dominant force in the defense sector by building substantial, sovereign production capabilities.

Sources in support: Mike Coulter (President and Chief Executive Officer, Hanwha Defense US)

Neutral sources: Tresa Gennov (Acting Senior Director and Senior Fellow, Atlantic Council's Scowcroft Center for Strategy and Security), Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program)

14. Eric: IBAS Sweetens the Pot for US Defense Investments

Timestamp: 00:59:17 to 01:01:27 - watch this moment on skim

Government initiatives like IBAS act as 'sweeteners' for allied companies looking to invest in the US defense industrial base. While the US market is attractive on its own, programs like IBAS make the business case even more compelling by incentivizing investment and providing access to the largest defense market globally. This encourages companies to bring their capabilities to the US, knowing they have government backing to help offset initial investment risks.

Significance (High): This framing suggests that government intervention is a key driver for attracting foreign direct investment in the defense sector. It highlights the strategic importance of such programs in fostering international collaboration and bolstering domestic industrial capacity.

Sources in support: Tresa Gennov (Acting Senior Director and Senior Fellow, Atlantic Council's Scowcroft Center for Strategy and Security)

15. Mike Heather: Multi-Year Procurements Drive Investment

Timestamp: 01:02:44 to 01:03:14 - watch this moment on skim

Multi-year procurements are a critical engine for investment in the defense industrial base, offering long-term, predictable demand signals that benefit both government and industry. These contracts require meeting specific criteria, including significant cost savings, making them a win-win scenario. The consistent demand authority provided by Congress, coupled with budget passage, ensures this predictable flow, which is essential for companies to make substantial investments.

Significance (High): This point underscores the power of stable, long-term government contracts in de-risking private investment. It suggests that policy decisions around procurement structures have a direct and significant impact on the health and growth of the defense industrial base.

Sources in support: Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program)

16. Eric: Helsing's US Factory and Market Traction

Timestamp: 01:09:13 to 01:10:12 - watch this moment on skim

Helsing is shifting its center of gravity towards the US, planning to grow its American business significantly. A key milestone is the opening of their factory in Martinsburg in December, which will produce 115 systems. The company anticipates customer visits and continued investment in the US industrial base, alongside new product drops and presence at operational exercises, signaling strong market traction and commitment.

Significance (High): This demonstrates a tangible commitment to US manufacturing and market presence. The factory opening and planned product rollouts are concrete indicators of growth and investment, signaling a long-term strategic focus.

Sources in support: Mike Heather (Speaker)

17. Eric: Iterative Design and Software Flexibility are Key

Timestamp: 01:11:09 to 01:12:45 - watch this moment on skim

To address the rapid evolution of battlefield needs, particularly highlighted by the Ukraine conflict, defense systems must be designed for iteration. This involves making hardware flexible enough to accommodate software updates and ensuring software can compensate for hardware limitations. Companies like Helsing are developing systems where software updates can be validated and deployed rapidly, on cycles as short as two weeks, allowing for continuous adaptation without requiring entirely new production lines.

Significance (High): This emphasizes a paradigm shift towards agile development in defense, moving away from rigid, long-cycle production. It suggests that software-defined capabilities and modular hardware are essential for maintaining a technological edge in modern warfare.

Sources in support: Eric Hillmer (Vice President of Growth, Helsing Inc.)

18. Deborah Kagan: The Need for Iterative Fielding in US Systems

Timestamp: 01:14:45 to 01:15:33 - watch this moment on skim

The rapid feedback loop observed in Ukraine, where problems are identified and fixed within hours, highlights a critical need for the US to adapt its system fielding and qualification processes. Current US procedures often require extensive re-qualification for even minor changes, hindering the continuous adaptation of capabilities. Modifying these processes is essential for the US to evolve its fighting and fielding methods effectively.

Significance (High): This raises a significant concern about the agility of US defense procurement and fielding processes compared to active combat zones. It calls for systemic reform to enable faster adaptation of critical military technologies.

Sources in support: Heather (Kongsberg)

19. Mike Heather: Hanwha's US Expansion and Partnership Strategy

Timestamp: 01:20:28 to 01:21:20 - watch this moment on skim

Hanwha, as a unique Korean conglomerate entering the US market, aims to be 'constructively disruptive' and seeks partnerships with companies that share this vision. They are actively collaborating with both large primes and startups on various platforms like UAVs, UUVs, and USVs. This strategy is crucial for building the necessary industrial strength in the United States and fostering global supply chain resilience.

Significance (High): This outlines a strategy for market entry and growth through collaboration, emphasizing the importance of partnerships in building a robust defense industrial base. It suggests a model for international companies seeking to integrate into the US defense ecosystem.

Sources in support: Heather Armen Trout (President and General Manager, Kongsberg US)

20. Mike's Investment Thesis

Timestamp: 01:24:35 to 01:25:17 - watch this moment on skim

Mike advocates for the aerospace and defense market, asserting that despite its competitiveness, it remains wide open for companies with disruptive advantages willing to invest. He cites Hanoa's successful contracts for the US Army as proof of concept, emphasizing the necessity of such investments for US re-industrialization.

Significance (High): This perspective serves as a strong call to action for potential investors and industry players, framing the defense sector as a lucrative frontier for innovation and growth, crucial for national industrial capacity.

Sources in support: Mike Coulter (President and Chief Executive Officer, Hanwha Defense US)

Neutral sources: Tresa Gennov (Acting Senior Director and Senior Fellow, Atlantic Council's Scowcroft Center for Strategy and Security), Steve Gruntman (Senior Fellow, Scowcroft Center's Forward Defense Program)

Industry Executives Promoting Company Investments (Medium severity)

Type: Commercial

The speakers are current executives of defense companies actively seeking or expanding US investments. Their presentations inherently promote their companies' capabilities and financial interests.

Significance: This creates a potential bias, as the executives are incentivized to present their companies in the most favorable light, potentially overlooking challenges or alternative solutions. The audience must critically assess claims about market expansion and technological superiority.

Think Tank's 'Captains of Industry' Series (Low severity)

Type: Commercial

The Atlantic Council's Scowcroft Center hosts this event as part of its 'Captains of Industry' series, which provides a platform for business executives. This format inherently favors industry perspectives.

Significance: While valuable for understanding industry viewpoints, the series' structure may limit the exploration of critical perspectives or potential downsides of industry activities. The focus remains on showcasing industry's role in public interests.

Industry Advocacy for Investment (High severity)

Type: Commercial

The speakers, representing major defense companies, are advocating for increased foreign investment in the US defense industrial base and highlighting the benefits of government support. This direct commercial interest could influence their presentation of the topic.

Significance: Their vested interest in securing contracts and favorable policies means their perspectives may prioritize company growth and market access over a purely objective assessment of the defense industrial base's needs or potential drawbacks of foreign investment.

Regulatory Navigation and Influence (Medium severity)

Type: Commercial

The discussion around ITAR and other regulations highlights the companies' efforts to navigate and potentially influence these rules to facilitate their operations and investments in the US.

Significance: While seeking regulatory clarity is standard business practice, the potential for companies to lobby for changes that benefit their specific business models raises questions about whether regulatory evolution serves national security interests or corporate agendas.