Honeywell Aerospace is accelerating work on defense products designed without restricted U.S. technologies as European demand for items outside U.S. export controls rises. NATO leaders this week disclosed arms agreements worth tens of billions of dollars during a meeting in Turkey, reflecting pressure on allies to increase defense spending in response to regional security concerns and U.S. calls for higher contributions.
Company executives and defense officials say European buyers are increasingly seeking systems free of the U.S. International Traffic in Arms Regulations - ITAR - amid worries that Washington could block the re-export of sensitive U.S. components embedded in foreign-made weapons. That demand is expected to be a subject of discussion at the world’s largest air show later this month, where some European defense firms and North American suppliers plan to address the market for parts not governed by ITAR.
Honeywell Aerospace intends to present a new ITAR-free product aimed at international defense customers at the Farnborough Airshow in Britain later this month, a source told industry contacts. The Arizona-based unit declined to comment on the planned announcement. In late June, Honeywell Aerospace Chief Executive Officer Jim Currier said the company had assigned about 1,000 engineers in Poland and the Czech Republic to design technologies that avoid U.S. export restrictions.
Currier described the European-focused effort as both strategic and cultural, saying: "Part of it is looking, acting, feeling and speaking like a European company." He added that the engineers in the company's European subsidiary operate under a clear directive: "Their main mantra, and drive and edict is to design non-ITAR technology for ... local strategy."
The decision comes as U.S. firms such as drone manufacturers expand their European operations, and as U.S. officials consider broader logistical and maintenance roles on the continent - including a proposed missile maintenance facility - while two defense contractors have discussed building ATACMS ballistic missiles in Germany for the first time.
Honeywell Aerospace expects its international presence to grow within its defense segment, which makes up roughly 40% of company revenue and includes products such as navigation systems and missile actuators. The unit reported that international sales made up around 30% of its defense business last year, up from about 18% in 2020.
Currier said the company is leveraging recent acquisitions to scale ITAR-free navigation technology. He pointed to Honeywell Aerospace's 2024 acquisition of Italy's Civitanavi as the basis for expanding non-ITAR products: "That has been the playbook. We are developing non-ITAR technologies for use in the EU and overseas for our partners in the Asia-Pacific region, like Japan and Korea," he said.
Industry participants and officials note that demand for ITAR-free components in Europe is not new, but geopolitical frictions between the U.S. and some NATO allies have intensified the push for alternatives that can be re-exported without U.S. approval. The Canadian government reported that conversations at last year’s Paris Air Show signaled stronger interest from European defense firms in sourcing North American suppliers that are not subject to ITAR, prompting efforts to integrate more closely into European supply chains.
Supplier executives say the shift is tangible on the factory floor. Michael Iacovelli, CEO of Toronto-area aerospace and defense parts maker Ben Machine Products, said clients now require more than half of the company’s work to be ITAR-free, whereas none of its work carried that requirement in 2018.
The growing appetite for non-ITAR systems touches multiple parts of the defense supply chain and could influence procurement strategies for governments, the commercial planning of defense suppliers, and the location choices of specialized engineering teams. For Honeywell Aerospace, the move is aimed at aligning product design and development with market demand in Europe and allied markets that need re-exportable systems.
Context and implications
- Honeywell Aerospace is responding to rising European defense demand by designing products that exclude technologies restricted under U.S. export rules.
- The company has assigned approximately 1,000 engineers in Poland and the Czech Republic to develop ITAR-free solutions and plans to announce a new international defense product at the Farnborough Airshow.
- International sales growth in Honeywell’s defense business has increased from about 18% in 2020 to roughly 30% last year, while defense accounts for about 40% of overall company revenue.