NATO Calls For Arms Industry Cooperation, U.S. Companies Could See FDI And Jobs Boom

By Joseph Hammond

California, it is said, won the Cold War. The innovative weapons and technology developed in the Golden State put the Soviet Union on the back foot. At the same time those jobs drove the development of a strong middle class in California during the boom years of the 1960s and beyond. Everyone it seemed wanted a defense job in California, any why not?

Then the Cold War ended. Production was scaled back. Some weapons systems were left in the design room. Some companies merged. Others went defunct.

The war in Ukraine coupled with rising fears over Taiwan and other conflicts there have spawned a new age of defense spending across the NATO countries. The United States is no exception and under Former President Trump the U.S. saw a notable spike in defense spending as well. As per Markets and Markets, the global defense spending was a whopping $1.7 trillion in 2022. That number will continue to grow this year.

The hot war in Ukraine is proving just as lucrative as the Cold War for many companies. As Forbes has previously reported defense start-ups are seeing higher than average interests from investors and listed companies continue to receive attention. This is important because such start-ups usually drive employment. NATO countries spent $360 billion on weapon systems, fighting vehicles and equipment. That is double the figure from 10 years ago. That total is even more shocking when one considers a decade ago many NATO countries were still locked into the struggle in Afghanistan.

“Despite this defence spending continues to grow and it isn’t just driven by the Ukraine war,” said Mustafa Veysel Güldoğan,” this bolds well for defence industry jobs in the United States and elsewhere.”’

Güldoğan is the President of the Turkish Atlantic Council. Like its American counterpart it is strong committed to strong NATO ties. Given the size of the market, the United States continues to receive interest from foreign investors in developing armaments. The final declaration from the recent NATO Summit in Washington called for significant industrial cooperation between member states.

“We will continue to reduce and eliminate, as appropriate, obstacles to defence trade and investment among Allies,” the declaration said, “ Building on the Defence Production Action Plan agreed at the Vilnius Summit in 2023, we commit to doing more together as Allies, including to strengthen defence industry across the Alliance, act urgently to deliver the most critical capabilities, and reinforce our commitment to NATO standards.”

The Turkish Atlantic Council is looking to host a major summit in Turkey in November to build on the momentum from Washington Declaration and open new investment opportunities.

Turkey is according to the Stockholm International Peace Research Institute largest weapons importer among NATO countries with the exception of Poland.

The capacity for such investments to bring jobs is well known. However, regulation often gets in the way. Notably, “Buy America” restrictions once prevented the Department of Defense from signing a contract with an American company which under NAFTA was sourcing crude steel from Mexico. The net benefit was a hit to American jobs. The CATO Institute in a recent blog post recalled what happened next:

“Thus, DOD instead turned to our allies for help, buying steel from Sweden, Germany, Israel, and Australia.”

The recent announcement of the potential sale of a key U.S. ammo manufacturer to a Czech has sparked controversy with in congress. This past week the Czech manufacturer has increased its bid for the U.S company. Similarly, President Joe Biden has voiced concerns about the acquisition of American steel assets by Nippon Steel with national security considerations being one aspect of this.

“The United States due to market size will continue to capture significant interests from defense manufacturers despite any particular issue, said Serdar Özyurt, Chairman of the Board of Özyurt Arms Industry Inc.

Ozyurt is one of the more innovative players in that defense field which have helped propel Turkish defenese companies to global success. The country now exports weapons and ammunition produced by Turkish engineers to over 100 countries around the globe.

Selcuk Bayraktar, the brother in law of the Turkish President was recently listed in Forbes list as one of the world’s richest men. The arms manufacturer rose to prominence with drones manufacturing. The companies TB-2 drone which has seen extensive action in Ukraine and other battlefields has become one of the world’s most iconic systems. What the AK-47 or F-86 Saber were for other eras.

Özyurt Arms Industry Inc., is one of Turkey’s leading firearm manufacturers and has hired design capabilities in the United States.

“ For companies around the globe involved in the defense sector this is a time of expansion, “said Özyurt, “I think it’s a very good time to work in the defense sector because employers are keen to develop and hold onto good employees. Furthermore, AI has yet to have the impact it has had in other sectors – but it soon will.”

It has accelerated its growth plans, especially in the US market. The Ukraine war has only accelerated interest in weapons production an export. However, for NATO countries the increased production has increased the risk of becoming the victim of Russian sabotage operations.

Last week multiple NATO intelligence services reported that Russia agents had plotted to kill a German arms manfactuerer. This is less of a concern in the United States which is one reason other countries are considering the U.S. market.

The defense boom also means that employees are increasingly working on projects that fly off the design table into production than ever before.

“In just one and a half years, we introduced Türkiye’s first AK-based 7.62×39 caliber infantry rifle to the market. We also produce 7.62×39 infantry rifles, 9mm pistols, and 308 and 309 sniper rifles. In three years, we have produced seven different firearms. Our [Research & Development] team in the United States has been critical to driving this success”

The Turkish defence industry produces weapons in many areas, from unmanned aerial vehicles to helicopters and many more. Özyurt Arms Industry has focused on firearms in five categories: infantry rifles, machine guns, pistols, sniper rifles, and submachine guns. We expect our export volume to increase by 20% in 2024.”

Özyurt Arms Industry’s Long-Range Sniper BMZ 338, Sniper Rifle YİĞİT21, and Pistol Efe19. Some of which could find uses on the civilian marker in the United States. The Kalashnikov Asi 21 Infantry Rifle is an standard infantry weapon which would be an upgrade for many countries.

In 2023, Özyurt Arms Industry Inc. exported weapons and ammunition to over 100 countries. Among these weapons the Asi-21 model, based on the Kalashnikov, holds the title of the first ever Turkish assault rifle. The weapon has proved popular with Özyurt Arms Industry having received orders from Azerbaijan, Poland, the United Kingdom, the United States, and several African countries. Indeed, NATO countries aren’t the only ones spending on new weapons Saudi Arabia and China are also driving global demand.

According to a recent report from Investment Monitor roughly a quarter of FDI in the aerospace and defense sectors globally targets the United States followed by France, Netherlands, Germany and the UK. Turkey is just one of several countries seeking to work more closely with the United States in line with the recent NATO declaration. FDI in the U.S. defense sector hit an all time high in 2023 according to the report. Good news for the future of work in the defense industry.

“We produce the most suitable solutions with a professional engineering infrastructure team to meet the military and defense needs of our customers and for modernization. The defense industry workers of today might be based in California, Anatolia, or Italy but, they must think globally,” Ozyurt said.