Europe might be increasing its defense spending, but it's moving way too slowly to be ready for Russia, says Saab CEO

Business Insider

03-06-2025

Saab's CEO Micael Johansson said that while Europe's leaders have announced huge defense spending hikes, the continent's processes are likely too slow to combat Russia.
"Now, we want to spend like 3.5% to 5% of GDP on defense. But then, when you start getting into the normal processes in terms of, okay, defense forces have to decide what to spend the money on, and then it has to be acquired by someone," Johansson told Business Insider on the sidelines of the Shangri-La Dialogue.
"The process is much too long still. It takes a long time before it gets into industry," he said, adding that he was worried about the gap.
As an example, Johansson said Sweden's recent boost in defense spending to 3.5% of GDP would take military authorities "six months roughly" to decide what to spend the funds on. And that's before acquisition and matériel officials come into the mix, he said.
"And so we're still looking at a couple of years before you actually get going, which is not good enough, I think, in times of war. Which is tragic," Johansson said, who was elected president of the Aerospace, Security and Defence Industries Association of Europe last month.
At the same time, the CEO raised concerns about Russia's warfooting manufacturing capability, estimating that Moscow was making up about five times as many artillery shells as all of Europe yearly.
"Europe has to take its own responsibility, so we need to have integrated our missile defense systems, the collaborative combat aircraft, we need to have space technology, we need to have hubs where we can do ammunition manufacturing," he said.
At the Dialogue, which ran from Friday to Sunday, Germany's defense chief Gen. Carsten Breuer raised a similar issue for his country.
"I think in Germany we are a facing a situation, or at least we faced a situation, where we had processes over processes and processes, and all those processes were developed not to spend any money," Breuer said at a panel on Saturday. "Because we had enough time, but we did not have the money."
Breuer said that if German officials deemed a process was moving too quickly, they would "then develop an additional process to slow it down."
European military officials have warned that their nations must be ready for a possible conflict with Russia by 2029, when they estimate that Moscow would be strong enough to launch an attack on the Baltic states.
Anxieties on the continent have been compounded by the second Trump administration's signaled reluctance to continue supporting regional defense in areas where European states are falling short.
President Donald Trump has called for NATO's European members to boost defense spending to 5% of their GDP. Some, such as Germany, have signaled an openness to such an eventual arrangement.
Saab, which manufactures the Gripen fighter jet that's geared toward fighting Russian threats, has seen a rapid surge in demand since the war in Ukraine began in 2022. The Nordics' biggest defense manufacturer reported 2024 annual sales of 63.75 billion Swedish krona, or about $6.6 billion. By comparison, annual revenue in 2021 was 39.15 billion krona.