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The boss of Italy’s Leonardo has said US President Donald Trump’s verbal “attacks” on Europe have given the region “an unprecedented sense of urgency” to bolster defence spending, as it signed a new joint venture with a Turkish drone manufacturer.
The defence group said on Thursday it had signed a memorandum of understanding with Baykar to create a joint venture that would significantly boost Europe’s drone production capabilities.
The war in Ukraine has driven the development of unmanned systems, with software-defined technologies including drones proving essential to enhancing armies’ ability to outsmart the enemy, alongside traditional hardware such as tanks and guns. Baykar, which is co-owned by a son-in-law of Turkish President Recep Tayyip Erdoğan, is one of the world’s leaders in artificial intelligence-enabled drone manufacturing.
According to Leonardo, the drone market could be worth €100bn in potential sales over the next two decades. The Financial Times first reported the partnership between the Italian group and the Turkish manufacturer last week.
Leonardo’s chief executive Roberto Cingolani told the FT in an interview that Trump’s recent criticism of Europe — including calls on Ukraine’s allies to shoulder more of their own security burden — had “given Europe a shake up and an unprecedented sense of urgency.”
His comments follow a weekend of intense European diplomacy which drew criticism from Trump. In a Truth Social post on Monday, the US president said: “Europe, in the meeting they had with [Ukrainian President Volodymyr] Zelenskyy, stated flatly that they cannot do the job without the US.”
On Tuesday, the US said it was suspending military aid to Ukraine, adding urgency to efforts in many European capitals to bolster their own military support for Kyiv.
Under Cingolani, Leonardo has made it a strategic priority to forge alliances with competitors such as Germany’s Rheinmetall and France’s Thales in a bid to tap a large export market and reduce European defence fragmentation.
The Rome-based major, partly owned by the Italian government, is part of a trio of defence champions, alongside Britain’s BAE Systems and Japan’s JAIEC — jointly funded by Mitsubishi Heavy Industries and the Society of Japanese Aerospace Companies — working on the development of a next-generation fighter jet under the Global Combat Air Programme (GCAP).
Cingolani said it was “not that easy” for defence groups to “decide who leads, who does this or that . . . after all, these are convenience marriages that must be convenient for all those involved”.
The group’s announcement on Thursday comes after European Commission president Ursula von der Leyen this week proposed a plan to free up €800bn to boost the EU’s defence spending.
Thales chief executive Patrice Caine on Tuesday challenged EU governments to follow through on their declarations with an increase in orders, saying: “The proof is in the pudding. If the orders come, we will be ready.”
Cingolani said it was important for companies to “show readiness” to work together, amid political fractures among the EU’s 27 countries. “We have already overcome a bit of fragmentation, and this is great news, the more alliances we forge the faster we move forward,” he said.
The Leonardo chief, however, said it would be complicated to bring all EU countries to an agreement on defence partnerships, adding that mergers were not on the horizon.
“M&A would be extremely difficult as it would mean cutting jobs . . . the solution is joint ventures with clear work share agreements,” Cingolani said.
“It’s complicated because we are competitors but it’s either now or never.”
