Swedish company Saab AB has been a cornerstone of the European aerospace and defense industry for almost nine decades. Renowned for its innovative approach, Saab develops military aircraft, surface-to-air missiles, submarines, and other defense systems for governments around the globe.
Saab today sits at the cutting-edge of defense technology, continuously enhancing its product portfolio to meet evolving security challenges. And with security once again at the top of the world political agenda, Saab has benefited. The $27 billion firm has seen its share price double since the start of the year and rise eight-fold since Russia’s full-scale invasion of Ukraine in February 2022.
[time-brightcove not-tgx=”true”]Micael Johansson has served as CEO and president of Saab since 2019. In May, he was also appointed president and chairman of the Aerospace, Security and Defence Industries Association of Europe (ASD), which represents over 4,000 defense-related companies across 21 European countries and works with policymakers and institutions across the continent to boost regional security.
TIME caught up with Johansson on the sidelines of last month’s Shangri-La Security Dialogue in Singapore.
This interview has been condensed and edited for clarity.
We’re here at Shangri-la Dialogue, where U.S. Defense Secretary Pete Hegseth just remarked that the Indo-Pacific is the “primary theater” for the U.S. Is that how Saab is seeing things? Do you feel that this is a region for you to expand sales?
We are not focusing only on Europe, and we are also in the U.S. But we have to be selective in what campaigns we can win, because bearing in mind Japan is very U.S.-oriented. [South] Korea as well. The Philippines has a big U.S. presence, especially in the naval domain. But we have things to offer that make a difference. And there is a feeling that, “OK, we want to have the support of the U.S., but we also maybe need to work with a few others.” Even Japan is opening up a bit; South Korea as well—they selected the C390 transport aircraft [produced by Brazilian firm Embraer] and not [Lockheed Martin’s] C130.
So, of course, we can find our niches and work here. But it’s super important the U.S. makes sure that these countries have the capabilities needed to work with them, and being interoperable is, of course, a given. That’s the perception we have in Europe. [The U.S.] has been crystal clear, independent of administration, that Europe has to take responsibility for its security and create deterrence. And I agree completely that we’ve been too naive for decades now, since the [Berlin] Wall fell that eternal peace will happen, and we come from a peace dividend. So we have a lot to catch up to do, but we have a good foundation of defense industries.
Secretary Hegseth talked about broadening the defense industrial base. That must be music to your ears in these days of “America First” that the U.S. wants to be collaborative for military industries?
Every politician, not only in the U.S. but also European, have now started to state that you don’t have any defense capabilities unless you have a strong industrial base. And I also think it needs to be tighter—so much will be software-defined going forward, so you will need upgrades all the time. You see it in Ukraine. This means that you have to have a business model where you work closely in peace time and also in wartime, if that happens.
What are some of the lessons Saab has learned from Ukraine in terms of the specific capabilities you’ve seen tested on the battlefield?
It’s going to be more and more autonomous systems in all domains going forward, for sure. Maybe one cannot draw full conclusions from the war in Ukraine—in terms of whether conflict will always look like that, if unfortunately we get a new one, because it depends on what kind of air superiority you have. And if that had happened, you maybe wouldn’t have seen this standstill World War I type of war, at the same time with the drones taking everything out in a 10 km [6 mile] “death valley” at the frontline. But autonomous systems and how often you have to upgrade your systems to cope with the congested environment, in terms of electronic warfare and stuff, we’ll see a lot of that going forward. So these things we’ve learned, and then we learned a few things from what we have provided, either indirectly donated by other countries, or directly to Ukraine, and how things are actually working on the battlefield. And that’s important feedback as well that affects our development going forward.
Saab is a Swedish company and your country recently joined NATO. How has that affected government support and the mindset of your business?
It’s a big thing for our country. Because being an independent country, nonaligned, that is all about sovereign defense capabilities. Of course, we’ve had our bilateral relationships before and we have been supplying things that are interoperable with NATO, so that’s not been a problem. But I think for the defense forces, being a country in the Nordic Region which now has to supply Finland—the transport perspective, the logistics, how to support the 1,300 km [800 mile] border that Finland has with Russia is, of course, something we never thought about. Before it’s all about moving things south, north; now it’s going to be west, east, and putting a number of capabilities and defense forces in Finland, and we’re also doing that as we speak in the Baltic states. So the whole defense concept and NATO capability targets, which we’ve never had before, will be some new things. Saab as a company is well positioned—we have a portfolio of everything from fighters to submarines to globalized airborne early warning and also lots of sensors, command and control, and advanced weapon systems. So portfolio-wise we’re in a very good position to support NATO adaptation.
Read More: The Man Who Wants to Save NATO
There’s been a lot of focus on maintaining a status quo in the Taiwan Strait and you’ve started doing deals with U.S. allies here. Is Saab’s Gripen E fighter a key component of that goal of maintaining peace and security in the Indo-Pacific?
We hope that we will be selected from some countries on the Gripen fighter side. Thailand has selected us, we have a campaign with the Philippines, we will see which way they go. They are U.S.-oriented but you never know; maybe they may need a more agile fleet, or dual fleet. But everyone selects what they think would be needed.
But these megadeals are extremely political. So, it’s prime minister level or defense minister level. So even if you have a fantastic product, they involve security agreements, and you have a government-to-government agreement. And if a country like the U.S. leans in and uses its leverage, of course, it’s difficult to win. But there are countries that do not want that and those are where we try to be successful. But we have a fantastic product, that’s not a problem.
But if you’re supplying countries which are U.S. allies enlisted as part of Washington’s strategy of containment of China, Sweden might face pushback from Beijing. Is that something which enters into your calculus?
It’s never been something that’s popped up. We never had any pushback from China for being in the region. Absolutely not. But it’s an interesting question. Can that happen? I don’t think so. But I can’t be 100% sure.
How are AI and other future technologies being infused into your products? And how do they aid the product development in terms of digital twins and things to be able to reach the market quickly?
AI agents are incredibly important when you have so much information to digest and to quickly get to a situation awareness picture. If you don’t use AI, you won’t be able to make out a reasonable situation awareness, and the quicker you can do that, the better you will [respond] toward your aggressor.
The future is not to create a super-secret electronic warfare library, where you would have your sensors picking out signatures on certain platforms and next time you fly you recognize: “This is a MIG29, this is a SU57.” Now the sensor systems are intelligent in the way that you can reshape your signal so that you have cognitive understanding of what the threat looks like. If you don’t use AI in that perspective, you’re done. That’s also the future. So we do include AI agents in our electronic warfare systems to continuously understand what you’re looking at, what you’re trying to hit.
And in terms of gray zone tactics, what are you learning from both Ukraine and what’s happening in other theaters?
There are lots of gray zone things happening, of course. It’s obvious … when you deliberately ruin cabling at the sea bottom, and the Nord Stream gas [pipeline] blowing up, and there are shadow ships “by mistake” dragging their anchors for 20 km. Crazy, of course. But also probing critical infrastructure and power junctions and stuff like that. And also agencies, authorities, even community offices have been taken out by cyber. Of course, there’s a cyber threat all the time and it’s a battle in itself to cope with that.
You’ve been made president and chairman of ASD. How do you expect to use this position to strengthen Europe’s security landscape?
These are very important times. We need to push for more collaboration and creating scale and to actually run a few flagship projects together, and to get the incentives from the [European] Commission to do that. To have countries put some money into a common bucket where we can do things together is important. Then I want the U.K. to be part of the European way of working on defense as if they were still in the E.U. That’s super important. But then we have the regulation perspective. So there’s lots to do from a European perspective. And the challenge is that the E.U. is a consensus organization. But industry can do a lot to create bridges by working together to create stronger defense in Europe. We have a good foundation of a defense industrial base, and that’s because we are globally competitive as industries, but we have so much spending going outside Europe in a different direction, mainly the U.S. I want a competitive landscape. But you can’t have the U.S. buying everything from the U.S.—98% or something—and then we’ve been spending like 78% outside Europe, and the majority of that in the U.S. We have to do more ourselves to be really competitive going forward and to take care of our security landscape.
As such, are President Trump’s tariffs positive for you, given selling between Europeans means avoiding these levies? Or will they still affect your supply chains?
In the end, it will [affect supply chains.] Of course, trade wars are terrible but I think we have a bit more resilience in our business segment, because we carry more stockpiles, we have some protection when it comes to contracts, we don’t have a hub somewhere where all the components are being built for everything we do—like the car industry, which could be extremely dependent on what’s happening in Mexico, for example. [Our industry] is more regionalized when it comes to the supply chain as well. But, of course, we have dependencies, and it’s not good, but it will take a little bit longer before we are super affected. Also, so many countries have reciprocal agreements between Europe and the U.S., where this is exempted from tariffs and taxes. I don’t know whether these executive orders overrule all of this—that has never been discussed—but, of course, it’s not good to have tariffs.
Are they dangerous for global security?
Yeah, I think they’ll create complexities, and maybe you don’t get the best capability because you have to rely upon other things—you can’t afford, or you can’t work with some companies, and then you get stuff that is not the best. So in the end, indirectly, it could be affecting what capabilities you build.
There’s been lots of changes in defense procurement like drone technology and undermanned submersibles. But what is the next great leap you are looking at in the future of the security industry?
Obviously, lots of swarm technology and drones and collaborative combat aircraft. But I also think [it will be] the connectivity aspect of systems. Everything will be connected going forward. And then you have hypersonic weapon systems and being able to protect yourself from them. That’s the big next step. It’s going to be dangerous, it’s going to be super quick, and that’s probably the next step. But how to use AI’s compute power is also absolutely something we put a lot of effort into.
President Trump recently advocated a Golden Dome missile defense system for the U.S. Is this something which Europe should also consider?
Absolutely. That’s the flagship project that I would like to push for—not only for Saab but also for ASD. We need to come together—industries and countries—to create things like that: integrated enemy cell defense systems with short, medium, and long-range capabilities. We don’t have that in Europe. We need to have that.
Is there enough cohesion and unity in Europe for this type of thing to happen?
I think so. We have the capabilities to do it. It’s just how you create that industry construct, and how do you align the requirements. It comes with aligning requirements and demand, and then industry will come together. We’re not really there yet. There have been political statements like the European Sky Shield Initiative, but it’s really slow. That’s the problem.
