STOCKHOLM For many, Saab brings to mind safe family cars, but today the company manufactures almost all equipment needed in war and defense, but no cars at all.
On Friday, Saab Group CEO Michael Johansson announced last year’s result, in which attention is especially drawn to orders, the value of which has more than doubled from the previous year.
– We hired a thousand new employees last year and we will definitely need another thousand more this year. The order book is a record high and we need more skilled workers.
At the end of the year, Saab had more than 18,000 employees, of which 15,000 were in Sweden.
Saab belongs to the Swedish Wallenberg industrial camp. Swedish Institute for Peace Research According to Sipri’s report (you switch to another service)Saab is the 34th largest military industry company in the world. In relation to the national product of its home country, Saab is large.
War benefits the munitions industry
Saab’s share value on the Stockholm Stock Exchange (you switch to another service) has almost doubled since Russia attacked Ukraine on February 24, 2022. After Friday’s results announcement, the share value started to rise.
Saab’s corporate management hardly hopes for war, but history has shown that war benefits the military equipment industry. Even now.
In Sweden, the change is perhaps exceptionally clear, because after the Russian attack, the country has changed both its defense policy and its attitude towards its own defense forces.
Finland and Sweden have cooperated closely with the defense alliance NATO, but applying for and becoming a member also imposes new conditions on the defense forces of the new member countries. The needs become more specific only when the countries are accepted as NATO members and become part of the strategic planning of the defense alliance.
It has been assumed in advance that NATO needs stronger ground forces from Sweden and a stronger presence on the strategically important island of Gotland.
Sweden’s NATO application turned Saab’s share price into a sharp rise
In May, Sweden’s application for NATO membership caused Saab’s share price to rise sharply, because in addition to the need for adaptation, NATO sets a condition that defense spending must be two percent of gross domestic product. For Sweden, it means almost doubling defense spending from the current level, which also means large additional procurements.
The third factor that benefits military equipment manufacturers like Saab is Western support for Ukraine.
Sweden has so far supported Ukraine with ten aid packages, of which the last one was clearly the largest, worth around 380 million euros.
The Swedish government also made its contents public. The Archer cannon system, NWAL anti-tank missiles and 50 CV-90 assault tanks are now being exported to Ukraine.
The support package is solid, because the weapons included in it are all Swedish-made.
Archer’s field cannon is developed by Bofors, and the transport platform is from Volvo. The NWAL anti-tank missiles are manufactured by SAAB and the CV-90 assault tanks by BAE Hägglunds in Örnsköldsvik.
Does the Swedish government have a right of first refusal?
Lecturer Martin Lundmark The Swedish National Defense University describes the relationship between the Swedish government and the military equipment industry as having changed at the same pace as perceptions of Sweden’s external threats.
At the turn of the millennium, Sweden estimated that it had no external threat, scaled down its defense forces aimed at defending the entire country, and focused on international special missions.
According to Lundmark, in the same context, Sweden gave up its ownership in the military goods industry and the companies were transferred to private ownership.
– But as a compensation for the fact that state support and orders decreased, the state supported export efforts and export campaigns, and exports grew a lot.
Currently, for example, 60 percent of Saab’s production goes to exports and 40 percent to Swedish orders.
Lundmark estimates that Sweden’s market liberal line, which is clearly different from other countries, such as Finland, is changing. Sweden is also starting to interpret EU articles like other countries, i.e. is starting to turn its eyes more and more to the domestic military equipment industry.
Submarines are an exception
But even in the years of external security, Sweden had its own exceptions, and submarines are one of them.
Sweden now has four submarines and two new ones are being built at Saab’s shipyard in Karlskrona. The plans include that two of the ones currently in use will be updated to the current level, and in the future the number will remain the same, but the operational capability will improve.
Commander of the Swedish Defense Forces Micael Bydén said in a radio interview in December, (you switch to another service)that in the future division of labor in NATO, Sweden would gladly take responsibility for the Baltic Sea, because it is the best at supervising it.
New and refurbished submarines certainly play a key role in monitoring the traffic of Kaliningrad, which is part of Russia, for example.