Abstract
ABSTRACT The naval defense industry plays a crucial role in national security, particularly in the context of global rearmament and shared threats. However, the industry’s performance in Europe has been hindered by factors such as decreased fleets, shrinking industry capabilities, and increasing production costs. This study of 102 large surface vessels (frigates and destroyers) from eight European countries found that production time is positively correlated with technical variables such as weight and speed. A small but significant learning effect also existed, with a 1.5-month decrease for each marginal increase of one unit in the batch. Regarding strategic sourcing, the study found no effect of the share of US subsystems on production time. However, European cooperation led to an increase in production time, likely due to higher coordination costs. Conversely, importing subsystems from a European ally tended to reduce production time. The study’s findings highlight the challenges facing the naval defense industry in Europe and suggest that strategies such as increasing batch size and cooperation with European allies can help to improve performance.
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