Ukrainian company Degree-Trans LLC, doing business as Bullet, on 16 October signed a letter of intent with US aerospace company AIRO Group Holdings to make this happen.
Bullet makes modular drone interceptors that fly up to 450 kilometers per hour, making them some of Ukraine’s fastest, with a range of up to 200 kilometers. The drones can carry payloads of up to 9 kilograms and are highly configurable for different types of missions.
AIRO is playing the role of manager to “integrate” these UAVs “into US manufacturing and defense infrastructure," according to AIRO’s press release.
“This partnership unites the innovation and front-line experience of Ukrainian engineers with AIRO’s manufacturing and program-management expertise,” AIRO executive chairman Chirinjeev Kathuria said in the statement.
Bullet director Viacheslav Lvovych said this would allow his company to expand battlefield-proven tech into new markets. “Our shared objective is to deliver rapid, reliable air-defense solutions that strengthen Ukraine and the wider NATO alliance.”
While preliminary, the agreement is a sign that Ukrainian and foreign companies are looking to take advantage of Kyiv’s intention to loosen restrictions on arms exports to countries it can trust.
President Volodymyr Zelenskyy told the UN General Assembly in September that his country has decided to open up exports. Ukraine needs the revenue — most domestic defense contractors are operating far below capacity because the government lacks the cash to pay them to make more weapons.
Kyiv is also looking to leverage its military innovation to gain closer integration with its allies from the European Union and NATO.
The players involved
Modularity and adaptability is quite standard for Ukrainian tech, as innovation has kept the country in the fight against a wealthier, more numerous foe, in the face of constantly changing battlefield conditions.
According to Ukrainian transparency platforms YouControl and Opendatabot, Bullet (Degree-Trans) used to service and sell parts for ground transport vehicles, but has since transformed into a drone-maker, which itself is not uncommon. Many mechanically handy Ukrainian firms switched to making drones or parts for them after the full-scale invasion.
AIRO has been around since 2005 and has four segments: drones, avionics, training, and air mobility, with drones being the focus. It already makes recon drones like its Sky-Watch brand and its RQ-35 Heidrun.
The company completed a successful initial public offering in June, with stocks rapidly rising above the IPO price, pushing the company's market value to around $650 million and giving it $60 million in gross proceeds.
Ukraine looking to harness its biggest asset: battlefield experience
AIRO’s deal appears to be what Zelenskyy and his government envision in their two-pronged effort to export battle-tested tech to interested allies, while launching as many joint cooperation agreements with partners in allied states as possible.
On top of being tested, Ukraine’s drones also tend to be much cheaper than those produced in NATO countries.
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In July, Zelenskyy discussed a drone "mega deal" with the White House, to the tune of tens of billions of dollars.
As Counteroffensive.pro reported, key challenges with the export scheme will be navigating the separate approvals required from the Ministry of Defense and its intelligence arm, the Ministry of Foreign Affairs and Ukraine's Security Service, then having it reviewed by the Intergovernmental Commission on Export Control.
Main issues include protection of intellectual property, specifying which countries are eligible for export, threat of sabotage, and estimating domestic production capabilities to ensure an exportable surplus.
Over 25 foreign companies looking to get in on the action
Kyiv recently established its Build With Ukraine program to allow domestic firms to open foreign production facilities.
According to a 22 October statement by the Ministry of Defense, more than 25 foreign companies are "at various stages" of production localization inside Ukraine. These include:
- BAE Systems from the UK to develop L119 howitzers.
- Rheinmetall of Germany, to create repair and production facilities for armored vehicles.
- SAAB of Sweden, to produce air defense systems.
- Northrop Grumman of the US for the joint production of ammunition.
Per the MOD, other companies include developers of unmanned systems, cybersecurity and anti-drone warfare systems.
