Good afternoon, and thank you to Keith Webster and the U.S. Chamber of Commerce for bringing us together on the eve of the Washington Summit to focus on the importance of our allied defense industries.
To all of you who make things for or provide services to NATO military forces, or that only allied forces need — from the prime contractors, to the tens of thousands of sub-tier suppliers in communities throughout every NATO country — thank you for supplying everything we use to defend the alliance: the ships and submarines, the stealth aircraft and small arms, the tanks, troop carriers, missiles, mortars, and more.
Our alliance, and our warfighters, rely on what you do — just as economic growth relies on a secure, stable environment. So we're in this together. And the same is true for our respective national defense industries, on both sides of the Atlantic. For as long as we've been allies, they too have been intertwined — sometimes by coincidence, sometimes by design.
Eighty years ago last month, when U.S. Army Rangers reached the base of Pointe du Hoc's cliffs, they arrived on British landing craft — not the American-made Higgins boats that you might've expected.
In the 1950s and 60s, when NATO pilots needed jets to counter Soviet MiG-15s, four European allies co-produced Lockheed F-104G Starfighters, with a central coordination office under NATO auspices.
Meanwhile, when the U.S. military sought weapons to defend against Warsaw Pact tanks, they bought the pioneering technology: three types of French wire-guided anti-tank missiles, forerunners to what many of our forces use today.
Ever since, the ties that bind the transatlantic defense industry have endured and evolved, over many decades and multiple continents: from NATO “STANAGs” that continually enhance our interoperability in Europe, to the U.S. Marine Corps' most recent use of Norwegian-developed Naval Strike Missiles for novel operational concepts in the Indo-Pacific.
And today, as we gather for NATO's 75th anniversary Summit, the transatlantic defense industrial base is at a pivotal moment.
The Covid pandemic revealed how fragile and brittle supply chains had become.
The war in Ukraine revealed how nation-state aggression is a real threat, requiring information-age ingenuity and industrial-era capacity.
And the rapid defense industrial expansion of our strategic competitors has revealed how defense industries across the Atlantic were affected by decades of inconsistent funding and blinkered demand signals.
Together, our task is to deliver combat-credible capabilities to our warfighters at speed and scale, so they can deter aggression against NATO populations and territory, and win if called to fight.
But the truth is, no engine of production has ever spun up from zero to 60 overnight. And that's why Secretary Austin has said the most important thing we'll do this year for the future of NATO is strengthen our defense industry.
For most of NATO's existence, many of our countries could tolerate years- and decades-long timelines, when at most we faced a single strategic competitor that was relatively slow and lumbering.
But this is not the Cold War, or the post-Cold War era. Even as we face the threat of Russian aggression in Europe, we also cannot ignore the global pacing challenge presented by the People's Republic of China. So we have to double down with urgency and confidence.
In light of these challenges — and especially in response to Putin's latest war of aggression against Ukraine — we've seen NATO become larger, stronger, and more united than ever before.
We've welcomed two new allies, Finland and Sweden, who bring unique capabilities and strengths.
We're refining NATO's most robust family of defense plans since the end of the Cold War.
We've provided vital material support to our partners in Ukraine, helping them defend and fight back against Putin's merciless war machine.
We've seen major progress on alliance burden sharing, with a record 23 allies now meeting the pledge to invest at least 2 percent of GDP in defense. That number has tripled compared to four years ago. And it should keep growing, because 2 percent is a floor, not a ceiling.
From the Baltic to the Black Sea, European allies are stepping up more than they have in a long time. Over the last two-plus years, allies in Europe have grown their share of alliance-wide defense spending faster than any two-year period since the Cold War.
That's only an acceleration of what began when Russia initially invaded Ukraine a decade ago — since then, non-U.S. allies have increased their real defense spending by an average of 72 percent, even after accounting for inflation.
All of this has redounded to the transatlantic defense industrial base.
Adding new allies increased our collective industrial capacity. Sweden brings one of Europe's largest defense industries, with a workforce nearly 30,000 strong — not to mention leading tech companies and significant, recently-discovered deposits of critical minerals. And Finland, whose defense industry includes some 130 companies, plans to more than double its ammunition production over the next three years.
Also, the Defense Production Action Plan signed at last year's Vilnius Summit sent a clear ramp-up signal to industry. And since then we've seen what aggregating our demand can do, as NATO's Support and Procurement Agency put $10 billion on contract in under a year.
In terms of our budgets, allies' average share of defense spending on equipment — including both procurement and related R&D — is nearly two-and-a-half times what it was in 2014. Now above 32 percent — well above the minimum 20 percent goal — that annual average has reached a level unseen since the mid-1960s, if not earlier; perhaps not since the rebuilding of Western Europe's defense industry after World War II destroyed it.
For its part, the United States has made significant, sustained investments — across four annual defense budgets and multiple supplemental funding bills — to strengthen the health, workforce, supply chains, viability, and productivity of the U.S. defense industrial base, short-term and long-term.
To help prime the pump, DoD's investments since 2021 have included:
- $2.4 billion for casting and forging, batteries, kinetics, and critical minerals;
- $10.3 billion for microelectronics, augmented by historic CHIPS and Science Act funds;
- $21.9 billion for industrial base infrastructure, workforce, and facilities, including shipyards and the U.S. submarine industrial base;
- $24.7 billion for multi-year procurement of key munitions, from Patriots, to Guided Multiple Launch Rocket Systems, to the SM-6 missile — which we recently revealed has an air-launched configuration that's operationally deployed;
- And, $6 billion alone just for dramatically increasing production of 155mm artillery shells. We're glad to see other allies increasing their artillery production too.
To put things in historical context: in real dollars, U.S. investments in defense R&D-plus-procurement over the first term of the Biden-Harris Administration — totaling $1.27 trillion — is the highest amount that DoD has invested in these areas across any four-year period throughout the entirety of the Cold War.
We're also working more with commercial tech companies, non-traditional contractors, and newer defense-tech startups and scale-ups, to complement the know-how and scale of our large defense firms. The cumulative effect is powerful, like how first-person-view drones have enabled Ukraine's precise artillery correction in real-time.
To be a better customer, we're innovating with our internal processes, to move at the speed of technology development — in sync with innovative operational concepts and force designs that together give us the ability to continually shape and master the changing character of warfare.
We're also using targeted investment tools to expand production capacity for things like solid rocket motors and radiation-hardened microelectronics.
We're helping industry access the information, tools, and tradecraft needed to defend their networks from intrusion and attack.
We issued DoD's first-ever National Defense Industrial Strategy — recognizing our defense industrial base must be actively, and strategically, shaped to meet this generational strategic moment. And we're encouraged to see other allies and partners implementing similar strategies.
Because production matters. Production is deterrence.
That's why, together with transatlantic allies, we're also expanding co-development, co-production, and co-sustainment of key capabilities. And we'd welcome more opportunities.
One example is taking place over 3,500 miles east of here, where across the Atlantic companies from the United States, Germany, Spain, and other NATO allies are jointly producing interceptors for Patriot air defense batteries.
Another example is underway 1,300 miles west of here, where a Turkish firm has worked with a U.S.-based company to set up three production lines for 155mm artillery shells in Mesquite, Texas.
Now, while we've come a long way, none of us should think it's enough.
Why? Because Vladimir Putin has put Russia's economy on a war footing. He's preparing for the long-haul, even reassessing Russia's nuclear doctrine. And he wants to buy, beg, or borrow whatever capabilities he can from his ad-hoc arsenal of autocracies, even if endemic corruption should make their quality suspect, and even in violation of U.N. sanctions.
In his desperation, he'll do anything to fuel the fires of war in Ukraine, no matter how it affects his handful of benefactors in Pyongyang, Tehran, and Beijing.
But the tried and true nature of our NATO alliance is an asymmetric advantage those countries will never outmatch.
They don't understand what it means to train together like we do — to plan together, exercise together, and operate together. Because it takes more than just landing at each other's airfields, or sailing ships alongside each other for a few days at a time.
Our alliance goes much deeper. We trust each other to defend each other. And we uphold our pledge to fight together, sweat together, bleed together, and make the ultimate sacrifice — together.
Indeed, the United States will never forget how NATO allies did so alongside us after 9/11. Because we know Article 5 is ironclad, for all of us.
And of course we buy capabilities together, and from each other. Not because we have no other choice, but because our interoperability and the strength of our collective industrial base is a force multiplier. It makes us more formidable than any adversaries we might face. Our competitors can only dream of that.
So I know we have what it takes — not just to compete, but to out-compete and prevail.
And that includes ensuring we are prepared for the possibility of protracted war, which every ally must be prepared for — and not just in Europe, either.
Even as we seek to deter aggression against all NATO allies, we know that competitors and adversaries always get a vote. So we have to be ready for whatever may come.
As part of that, we must accelerate the growth of our collective defense industrial capacity and production, to deliver at greater speed and scale together.
Adding more shifts on current production lines is not enough. We need to add more lines, build more factories and facilities, and bring more producers into the fold.
Make no mistake: Expanding transatlantic defense industrial capacity is not a nice-to-do. It is a need-to-do, a must-do for the NATO alliance — key to meeting our deterrence-and-defense objectives today, tomorrow, and for the foreseeable future.
Specifically, we need even more large-scale, multinational procurement — going beyond the remarkable achievements we've seen over the last two years.
We need to keep securing supply chains. Because the integrity and resilience of sub-tier components and suppliers is imperative in this era of strategic competition.
We need to more rapidly and responsibly adopt new technologies wherever they can add military value — like advanced manufacturing, biotech, and all-domain attritable autonomous systems.
We have to keep improving the interoperability and interchangeability of allied capabilities — leveraging modular open-system architectures and NATO standards. That matters for software, too, not just hardware. The more we integrate commercial-off-the-shelf, the faster we can iterate.
We have to keep tackling workforce challenges — including by leveraging national kick-start investments that can benefit the defense industrial base, like we're doing here with funding to expand U.S. production of semiconductors and clean energy.
And we also must step up international defense industry cooperation with like-minded democracies wherever we can — with NATO allies, and non-NATO partners — without letting that stop us from delivering what NATO must deliver as an alliance.
Because the truth is — whether it's a new production facility on the European continent funded primarily by E.U. investments, or co-production and co-sustainment with U.S. Indo-Pacific partners like Australia, Japan, and the Republic of Korea — when fellow democracies work together to build and sustain things that NATO allies need, and that allies could perhaps one day buy and benefit from, that's good for all of us.
And that is why now 12 nations, in both Europe and the Indo-Pacific, are working together to increase access to and capacity from the Indo-Pacific region, as we look to establish global resilience in defense supply chains.
I know for years, the phrase "arsenal of democracy" was understood to mean how U.S. defense industry, and that alone, supported the allied war effort.
But those days are long over.
Today's arsenal of democracy is not only American. It's not only western, either.
Today's arsenal of democracy is global. It's a testament to what we've built over the last 75 years. And it benefits us all.
But remember: to have a healthy, resilient, thriving arsenal of democracy, we also need healthy, resilient, thriving democracies. The two are inseparable.
Because starting a business, investing in others, inventing a product and taking it to market depends on safeguarding the democratic principles and institutions that provide the blanket of liberty under which you do so.
We want private-sector innovation to succeed. We need the private sector to feel the same about democracy. Because neither can thrive unless the other survives — and we want both to continue to long endure.
No democracy is immune from the authoritarian winds that sweep the globe. We have seen America and other allies tested routinely. While they have withstood, we cannot take that for granted.
Seventy-five years ago, when then-U.S. President Truman spoke at the signing of the North Atlantic Treaty, he described some of the longstanding ties that bind NATO allies together, including, “a common heritage of democracy, individual liberty, and rule of law.”
He also said that "with our common traditions we face common problems. We are, to a large degree, industrial nations, and we face the problem of mastering the forces of modern technology in the public interest."
"To meet this problem successfully," he said, "we must have a world in which we can exchange the products of our labor not only among ourselves, but with other nations."
That is why NATO was born all those decades ago — to provide the security on which our shared peace and prosperity depend. And that is why NATO will continue to live on for many decades to come.
Thank you.