Boeing and Saab have often found themselves on opposite sides of the playing field, pitting their fighter jets against one another for lucrative international defense contracts. In 2013, Brazil selected the Swedish Gripen over American-made Super Hornet, a huge score for the Scandinavian company, which is among the top 10 defense firms in Europe.
But more recently, the two companies found themselves as teammates pursuing U.S. and global business.
“We feel good about the partnership,” Michael Andersson, the president and CEO of Saab North America, said in interview Tuesday. “Everything we’ve seen so far is very, very positive and we’re focusing on other potential opportunities where we will add value by teaming up together.”
The companies announced Tuesday that they are working to transform Boeing’s Small Diameter Bomb – a guided weapon typically launched from fighter and bomber plans thousands of feet in the air – into a ground-launched rocket artillery piece. The two firms are also quietly developing a new jet trainer aircraft in hopes of landing a multibillion-dollar deal with the U.S. Air Force. Outside of defense, Saab is a supplier on the Boeing’s 787 Dreamliner commercial airliner.
“We’re looking broadly throughout our portfolios and we’re not really limited to any area at this stage,” Andersson said of the Boeing-Saab relationship.
Saab’s U.S. growth strategy includes such teaming arrangements, growing organically and acquiring companies, Andersson said.
The arrangement between Saab and Boeing to build a ground-launched Small Diameter Bomb was signed in August with the goal of addressing what Andersson called a capability gap in the market. Unlike current rocket artillery, the weapon could travel further and strike targets in front or behind the launcher, including targets on the backside of a hill or mountain, according to the companies.
The companies successfully tested a rocket mated onto a Small Diameter Bomb in February.
Under the teaming arrangement, each company has “defined roles and responsibilities, but we’re also fairly agile in that relationship so we can take different roles depending on various customers globally,” Andersson said.
The companies – which are “equal partners on this program” – are hoping to sell the weapon to 10 countries, including the U.S. Army and other nations, that use the Multiple Launch Rocket System, he said. U.S. allies in Europe, Asia and the Middle East use the rocket launcher.
“We really like the fit between Boeing and Saab in terms of our engineering capabilities, in terms of how we approach an opportunity like this and how we invest in opportunities like this. We think our capability is matching and together we’ll be stronger.”
The artillery collaboration “underlines that the initiatives we’ve had previously are running very well and smoothly,” Andersson said. “It seems to be a very nice culture fit. At the end, we have to enjoy working together and that’s what we see.”
Boeing spokeswoman Katie Kelly said the Boeing-Saab collaboration on the ground-launched Small Diameter Bomb “is a continuance of our companies’ ability to define and redefine defense innovation in a more for less environment.”
Byron Callan, an analyst with Capital Alpha Partners, called the relationship between Boeing and Saab intriguing. “I think this really gets down to personal chemistry between the two leaders of Boeing defense and the Saab Group,” he said. If Boeing and Saab are successful in the U.S. Air Force’s trainer contest, the project could evolve into a low-end fighter or attack aircraft, Callan said.
The Saab-Boeing partnership could grow and possibly include another player in Embraer, South America’s largest aerospace firm. When Saab inked the Gripen contract with Brazil, it included a teaming arrangement with Embraer.
Embraer will have a “leading role as the strategic partner” on the project and “Brazilian industry will have an important role in the development of, and be responsible for, the production” of Gripen jets for the Brazilian Air Force, according to an October 2014 Saab statement.
Embraer and Boeing signed a teaming arrangement in 2012 to collaborate on the KC-390, a military transport plane for the Brazilian Air Force. In 2013, the companies deepened that partnership when it was announced Boeing would help market and sell the cargo plane in the U.S., U.K. and Middle East.
Brazil is reportedly interested in a version of the Gripen that can land on an aircraft carrier, an area where Boeing has an expertise from its work on the U.S. Navy’s Hornet and Super Hornet fighters.
It’s possible that the three companies could end up helping one another out at some point, Callan said.
“There’s a global triangular relationship that could develop that would have ramifications well beyond the Brazilian, Swedish and U.S. markets.”