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Saab To Consolidate US Defense Holdings

Oct. 22, 2013 - 03:45AM   |  
A soldier fires a simulated AT4 rocket launcher during testing at Fort Riley, Kan. The AT4 is produced by Saab.
A soldier fires a simulated AT4 rocket launcher during testing at Fort Riley, Kan. The AT4 is produced by Saab. (US Army)
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Saab, the Swedish company that is the world’s 30th largest defense contractor, is combining its US defense businesses under the new Saab Defense and Security (SDAS) USA banner, the company will announce today. The new group will try to continue recent US revenue gains by Saab, which doubled to more than $500 million in the last three years.

Saab Training USA, Saab Barracuda and Saab Support and Services will be merged into the new company, consolidating their three separate special proxy boards into one, company officials said.

The move continues a concerted effort going back to 2010 when the company decided to become more aggressive in the US. Prior to 2010, executives were hesitant to commit to the US market because of the perceived difficulty of entry, officials said.

Now, the companies will be combined to make growth easier without any layoffs, said Lars Borgwing, the man tabbed to be the CEO of SDAS. And although there will be some savings by merging structures, that’s not the point, he said.

“The basic reason for doing this whole thing is to grow in the United States,” Borgwing said. “We see opportunity, and we like opportunity.”

One of the major tactics the company intends to employ is bringing completed products to the table as ready-to-go alternatives to development programs. Saab saw recent success on that front with the Sea Giraffe radar, which was selected for the LCS program.

While defense holdings are being brought together, the air traffic management business will remain separate.

SDAS will initially have 250 employees, although Borgwing said the company is looking at acquisitions in the US to help it grow. Still, there’s no rush and the company will only move when it sees a clear opportunity to add value.

“We’re patient,” he said.

But there’s also a touch of humor to the move, he said. Just as US companies are busy trying to build business overseas because of US defense cuts, European companies are trying to move into the US defense market because of European defense cuts.

“You can see the irony of consolidating the business and bringing jobs to the United States when the domestic companies are trying to become more international,” Borgwing said.

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