Special Report: The Swiss Defence Industry
A closer look at Swiss defence companies, spending, controversy...all in the shadow of European war
Dear Insider,
With mountains of incredible beauty and a policy of neutrality that has preserved both its beauty and its economy through two world wars, Switzerland would seem to be eminently defensible.
And that is even before considering what for decades was touted (internally…) as the world’s best military - the Swiss Army.
But somewhere along the way, things got complicated…
Left-wing pacifism continued to rise and after the fall of the cold war, few Swiss saw the need for as robust a military as the country used to boast of.
Now?
It’s getting ugly…
US President Trump threatens to abandon Europe in the face of Vladimir Putin. Other European countries are found lacking in defence capabilities - Germany most of all.
And in Switzerland - multiple “earthquakes” are shaking the Swiss sense of security.
It’s time to take a closer look at the Swiss defence industry…with all its faults and flaws.
Dive in,
Ian
💡PS: Let me know what you like (or don’t) about this particular “deep-dive” episode. Just reply to this email. 🙏🏻
Feel free to connect on LinkedIn - or I am also on Bluesky - the fast-growing X alternative…
🔢 By the numbers
How do defence expenditures and defence output measure up on a global scale? Here are the numbers….
Defense Budget and Expenditure:
Projected Growth: The defence budget is expected to grow at a compound annual growth rate (CAGR) of over 5% from 2024 to 2028.
Military Spending as Percentage of GDP: In 2023, military expenditure was reported at 0.70272% of Switzerland's GDP.
Defence Industry Overview:
Number of Companies: The Swiss defence sector comprises approximately 1,000 manufacturers and suppliers.
Annual Sales: These companies collectively generate around $2.57 billion in annual sales.
Employment: The industry provides jobs for about 14,000 individuals.
Weapon and Ammunition Manufacturing Sector:
Market Size: Projected to reach €815.6 million by 2025.
Number of Businesses: There are 18 companies operating in this sector as of 2024, with a growth rate of 3.7% between 2019 and 2024.
Industry Growth: The sector experienced a CAGR of 6.5% from 2019 to 2024.
Arms Exports:
Global Ranking: In 2019, Switzerland was the world's 12th largest arms exporter.
Export Decline: Arms exports decreased by over 25% in 2023, partly due to restrictions on re-exporting Swiss-made weapons to conflict zones.
➡️ Swiss defence companies to know
Manufacturing capabilities, along with solid innovation, is key to a strong defence industry. These companies are playing a role in keeping Switzerland (and Europe) safe…
General Dynamics
General Dynamics European Land Systems-Mowag GmbH, headquartered in Kreuzlingen, Switzerland, specializes in the development and production of armored fighting vehicles, notably the Piranha and Eagle series.
As part of General Dynamics European Land Systems, led by President Antonio Bueno, the company contributes to a workforce of approximately 2,400 employees across multiple European sites.
While specific financial figures for GDELS-Mowag are not publicly disclosed, the parent company, General Dynamics, reported a net earnings increase of 14.2% in the fourth quarter of 2024, with revenues reaching $13.3 billion.
RUAG Defence
RUAG Defence is a key division of RUAG Holding, specializing in land systems, communications, cybersecurity, and simulation technologies for the Swiss Armed Forces and international defence markets. The company provides maintenance, modernization, and life-cycle management for military equipment, including combat vehicles, ballistic defence systems, and mobile control rooms.
It also offers advanced command and control solutions, reconnaissance systems, and cyber-defence capabilities, ensuring operational security in an increasingly digitalized military landscape.
With production sites in Switzerland and Germany, RUAG Defence plays a strategic role in maintaining Switzerland’s sovereign defence capabilities while expanding its technological footprint globally.
RUAG has come under heavy fire in recent days for a highly disturbing case of fraud, whereby employees of the company sold material for personal profit.
B&T AG
B&T AG, formerly known as Brügger & Thomet AG, is a privately owned Swiss defense company headquartered in Thun, specializing in the design and manufacture of firearms, suppressors, and tactical accessories.
Founded in 1991 by Karl Brügger and Heinrich Thomet, the company initially focused on producing suppressors for the Swiss market.
Over the years, B&T expanded its product line to include firearms such as:
MP9 submachine gun
APC series carbines
GL06 grenade launcher.
As of 2017, the company employed approximately 70 people and has established a global presence, supplying law enforcement and military agencies worldwide. In March 2019, B&T was awarded a $2.6 million contract by the U.S. Army for its APC9K subcompact weapon, underscoring its reputation for innovative and reliable defense solutions.
Elbit Systems Switzerland
Elbit Systems Switzerland, a subsidiary of the Israeli defense company Elbit Systems, was established in 2020 to enhance collaboration with Swiss partners and implement advanced defense projects.
The company focuses on innovation and technology transfer, aiming to provide cutting-edge solutions tailored to the Swiss Armed Forces' needs.
In 2023, under the leadership of CEO Andreas Cantoni, Elbit Systems Switzerland initiated a significant recruitment drive to bolster expertise in telecommunications, cyber intelligence, robotics, and systems engineering.
SwissP Defence AG
SwissP Defence AG specializes in the production of ammunition and related components. The company provides a range of products, including small-calibre ammunition and specialized ammunition for snipers and law enforcement to meet the needs of military and law enforcement agencies.
Rheinmetall Defence Group
Rheinmetall Defence Group, a prominent German defence contractor, maintains a significant presence in Switzerland through its subsidiary, Rheinmetall Air Defence AG, headquartered in Zurich.
This Swiss branch specializes in advanced air defence systems, notably the Oerlikon Skyshield, a modular short-range air defense system designed to counter a variety of aerial threats.
As of December 2024, Rheinmetall employs approximately 11,000 personnel across its global operations.
Rheinmetall's Swiss operations play a crucial role in the company's air defense capabilities, contributing to both national and international security solutions.
🫣 Ups and downs…
The Swiss defence industry - understandably - is squarely in the spotlight at the moment.
With war (still) raging in Ukraine and most European countries scrambling to increase their military budgets, the market is most definitely in flux.
Developments in Switzerland are no less dynamic…
🫡 Who’s in charge?
Starting at the very top, the Swiss defence community is facing upheaval.
Much has already been made of the the departure of Defence Minister and Federal Councillor Viola Amherd.
Her (somewhat surprising) resignation in January came after intense fire from the right about what they viewed as her lax hand in overseeing the Swiss army and various defence projects.
Not only was she criticised for having forced through the purchase of F-35 jets from the USA, but also for having been in charge when a wide variety of specialty projects went wrong.
Meanwhile, on Tuesday…
…Swiss Army Chief Thomas Süssli has submitted his resignation, effective at the end of 2025.
Additionally, Christian Dussey, head of the Federal Intelligence Service, has reportedly resigned, effective at the end of March 2026.
(Both resignations were leaked to the Swiss media, before the Defence Ministry could prepare… A criminal complaint has now been filed over the leaks…)
Süssli, appointed in 2019, was a surprising choice due to his background in finance and limited military experience. During his tenure, he emphasized cyber defense and increased military funding.
The rash of departures raises the question - who will lead the Swiss defence services? And how well is Switzerland prepared for a new conflict in Europe?
📢📢In a strange twist of events, Blick.ch reports that Viola Amherd resorted to a special escape route to avoid media this week - exiting the Bundeshaus through a secret door——in the men’s toilet. 🚽
❌ Scandal at RUAG
Speaking of scandals…
It came to light on Monday that a recent audit has uncovered significant fraud within RUAG MRO, the Swiss state-owned defense contractor responsible for maintaining the a large portion of the country's military equipment.
The Swiss Federal Audit Office (SFAO) released reports detailing how a former RUAG executive manipulated valuations and sales of tank parts, leading to losses estimated in the high double-digit millions.
This individual allegedly sold undervalued decommissioned tank components to a German company, which then resold them at substantial profits.
Notably, a whistleblower reported these activities in 2019, but RUAG's management dismissed the claims after an internal review.
In response to the audit, RUAG's new leadership has pledged to investigate the misconduct thoroughly and implement corrective measures.
🛸 No-fly Hermes
In 2015, the Swiss Army ordered six Hermes 900 HFE drones from Israel, expecting them operational by 2019.
As of January 2025, these drones remain non-operational, with the Swiss Federal Audit Office (SFAO) criticizing the project for ambitious modifications, including a diesel engine, de-icing system, and an unproven "detect-and-avoid" system. T
These customizations transformed the procurement into a complex development project, leading to delays and cost overruns.
They now totalling approximately CHF 300 million.
The SFAO recommends reassessing the project's viability, while Defense Procurement Chief Urs Loher opposes cancellation, citing significant financial commitments and potential legal disputes.
🤑 Budget spats
The controversy around the RUAG mess isn’t the only storm involving the Swiss armed forces and money in recent years.
Budget problems have been an (almost) constant topic over the past 10 years…
2014:
Swiss voters rejected a $3.5 billion deal to purchase 22 Saab Gripen fighter jets, with 53.5% voting against the acquisition.
2020:
A referendum narrowly approved the Air 2030 program, allocating approximately CHF 6 billion for 36 F-35A fighter jets.
2022:
The Swiss Federal Assembly voted to increase defense spending by CHF 1.4 billion by 2030, aiming to reach at least 1% of the country's GDP.
2024:
Reports indicated the army faced a funding shortfall of about CHF 1 billion by the end of 2025.
The government projected annual budget deficits rising from CHF 729 million in 2025 to CHF 2.54 billion by 2028, driven by increased military spending and efforts to reduce carbon emissions.
Parliament approved an additional CHF 4 billion for the army for 2025 to 2028.
2025:
President and Finance Minister Karin Keller-Sutter forecasted annual budget deficits of around CHF 3 billion in the coming years, attributing this to higher military spending and pension costs.
🔑Key industry players
Besides the people at the top of government and the armed services…whoever is left…there are several key organizations to know in the Swiss defence industry.
armasuisse (Website)
As the procurement arm of the DDPS, armasuisse is responsible for acquiring defense-related materials and managing technology and real estate for the Swiss Armed Forces. It also oversees the Cyber-Defence Campus, which focuses on cybersecurity research and innovation.
SWISS ASD (Aeronautics, Security and Defence) Group (Website)
An association of internationally active companies in the security, defense, and aeronautics industries, SWISS ASD promotes collaboration and represents industry interests.
Association for Swiss Industry Participation in Security & Defence Procurement (ASIPRO) (Website)
Established in 2015, ASIPRO aims to enhance the involvement of Swiss companies in aerospace, security, and defense projects both domestically and internationally.