Ukraine may become global player in UAV market – AZDIC CEO

Signing of a memorandum of cooperation in the U.S. between Secretary of Strategic Industries Alexander Kamyshin and Arizona Defense Industrial Coalition President and CEO Lindy Smith
Signing of a memorandum of cooperation in the U.S. between Secretary of Strategic Industries Alexander Kamyshin and Arizona Defense Industrial Coalition President and CEO Lindy Smith

Lynndy Smith, President and CEO of the Arizona Defense and Industry Coalition (AZDIC), was appointed to the Supervisory Board of Ukraine’s state enterprise Ukrainian Defense Industry (UDI) on Dec. 29, 2023.

In an interview with NV Radio on Feb. 1, Smith spoke about the development of Ukrainian arms industry and partnership with the United States.

NV: So, let’s start from the very beginning. With your new position on the supervisory board, what are your goals in this regard?

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Smith: Of course, by nature, the role and responsibility of the supervisory board is really to protect the interests of the state, as well as control and regulate the activities of the CEO to ensure transparency and operational success. When it comes to the board, our goals are about increasing production, making sure we build an anti-corruption infrastructure, and obviously completing the defense industry reform. All of this with a goal of transforming UDI into a modern defense company that’s efficient, technologically advanced, and transparent. This, in turn, would ensure further success of Ukraine and UDI, both in exports and in partnerships with other countries.

NV: It sounds like transparency is a major focus for you?

Smith: Absolutely. Coming from the United States, our major goal is to help kind of spur and inspire the [defense industry] policies that we have in the United States. I speak with my allies and my coworkers over in the United States about the importance of Ukraine, its security, as well as its prosperity when it comes to domestic defense industry.

NV: You are also the CEO of the Arizona Defense and Industry Coalition. What can Ukraine absorb in terms of experience from the U.S. defense industry?

Smith: Honestly, in this area, I think we have a lot of opportunity to learn from each other. From what I’ve seen so far in Ukraine, there’s a lot of advancement when it comes to technology and cyber, and an area in which there’s an opportunity for U.S. companies to be working with Ukrainian companies on how to evolve and to innovate in this respect.

Additionally, as I mentioned, I think specifically when it comes to what can Ukraine learn from the United States are the different policies we put in place to ensure not only the security of our products, but also the transparency within our systems that allow for an open and honest procurement system, something that I think will always need work even in the United States, but something that I think Ukraine is well on its way to developing.

NV: Let’s talk about some types of weapons under development here which you think are the most promising?

Smith: I think that the key focus for Ukraine really needs to be on those technologies that are most needed to win the war today. Things like ammunition, drones, armored vehicles, anti-tank systems, as well as obviously, air defense, which is critically important to the entire region.

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I think Ukraine is thinking very innovatively when it comes to how do we start to look at producing these weapons or securing these weapons, not just from our allies, but how do we actually produce them domestically.

And I think the way that Ukraine is looking at doing this in a long-term objective of not just producing them so that we can win the war today but producing them so that we have a way to build a large economic powerhouse of arms production in the future.

So, I’m excited to see specifically that Ukraine has made a lot of advancement when it comes to drone production. This is something that I think, obviously is needed for the war today, but that Ukraine specifically stands to become a global player in.

[I’m] happy to say UDI has already led on and developed long range UAVs of its own design and has signed three different agreements with large companies to manufacture their UAV models. So, I think this will be a primary export of Ukraine in the future, but also something that is absolutely needed to win the war against Russia today.

NV: You mentioned air defense systems. We all read media reports about Franken SAM — the joint U.S-Ukrainian project of coupling Soviet-era AA systems with Western anti-air missiles. What can you say about this project?

Smith: So, I think looking at the partnership on what we’d call hybrid air defense systems under Franken SAM is going to be really important to show basically what the United States and Ukraine can be doing together when it comes to joint production.

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A lot of different technologies are involved, and this will go both ways eventually. But there’s a lot of different opportunities for Ukraine to advance its technology by doing joint ventures with industry across the globe, one of which would be the United States through Franken SAM.

So I think specifically looking at this technology, and the way that it’ll be able to reach a distance of I think nine kilometers is what I saw, is going to be really crucial to helping to strengthen air defense domestically, but also allow us to produce those technologies domestically in Ukraine so that we can produce them hopefully more quickly, in greater volumes, and as well as eventually one day even potentially export those for profit to the Ukrainian state.

NV: Going back to your goals, is it about helping Ukraine win the war? Or is it about a proper and transparent defense procurement system? Or is it about economic issues?

Smith: I would say they’re all of the above, but they come in stages, right? Obviously, the first and immediate goal is not only procuring but supplying what is needed to win the war today, that is by far the most important item that we can focus on for now.

However, in order to do that, we know that we can’t just rely on our allies—we need to be figuring out how do we produce weapons or munitions as quickly as possible within our own borders. As part of that what is needed is opportunities for joint ventures with different industry across the globe, in which we could be speeding up tech transfers or licensing production in Ukraine.

And once this creates an opportunity in which we have domestic production, then comes the future goal of how to turn this into a sustainable economy for Ukraine in the long run.

NV: Speaking of allies, Ukraine has been waiting for the U.S. Congress to vote for additional military aid for more than three months now. Do you think we can expect that to happen at all at this point, and should we be worried about the prospect of Donald Trump returning to the White House in 2025?

Smith: Yeah, it’s a great question, and I think we’re all watching really closely what’s happening in Washington right now, and what this next round of funding is going to look like.

I obviously can’t speak on behalf of what, you know, [incumbent U.S. President Joe] Biden, or Trump will do, should they be elected or reelected. But all I can say is that, based on my experience on the Capitol Hill, I think there’s a very common understanding that support for Ukraine needs to continue. There are different ways, obviously, in which people see that kind of aid being passed. But what I have seen is that we have been able to allocate, as you all know, the $75 billion that has been allocated from the United States [since early 2022]. And what a lot of people don’t know is that some of these funds, while allocated have not actually been implemented yet in Ukraine, but they’re kind of sitting in limbo, if you will.

And so that’s part of what I do through my work at the Global Defense and Industry Coalition is help industry that I work with here in Arizona and across the nation, find ways to tap into that funding that is readily available for U.S. companies to be serving the needs of Ukraine, and a lot of that is just breaking down that bureaucracy, breaking down that red tape to ensure that Ukraine is getting what it needs.

Again, I’ll say that I think we’ll see in the coming weeks how that funding ultimately ends up getting passed through.

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But I would definitely emphasize and do regularly on the Hill that continued support for Ukraine financially needs to continue from the United States. And this support is not just a blank check to Ukraine, I think that’s a common misunderstanding that we see in the United States that, you know, we’re just throwing a bunch of money, and that it doesn’t, you know, support, or help the United States at all, which is just completely false.

First, a secure Ukraine means a secure ally in Europe, helping protect our allies in the region.

Additionally, as we’ve been talking about, a lot of this funding can go to support different efforts around joint production, which helps companies that are partnering with Ukraine on these joint ventures, builds economic development.

And so that’s a lot of what we do on the Hill is talking about the economic and geopolitical reasons for supporting Ukraine, alongside, of course, the obvious humanitarian need of aiding Ukraine against the unjust war brought on by Russia.

NV: Our pilots are training on F-16 fighter jets in Arizona. In your assessments, when will the first batch of trained pilots will be “graduate” from this program?

Smith: First of all, I just have to say that I’m so proud and excited that Ukrainians chose Arizona as their home for training. We have a world-renowned Training Center of the 162nd [Fighter Wing] where the Ukrainians are currently stationed. When we heard that there would be allocation of F-16s to Ukraine, it was actually one of our goals on my first trip to Ukraine to the government about the need to train these pilots at the 162nd in Arizona. So, I’m just very happy that that happened, and that they’re here with us.

Now, unfortunately, due to security reasons, the date that they graduate is not public information. But I’ll say is that, obviously, given this technology, given this innovation that’ll be absolutely instrumental for Ukraine success, it’s really important that those pilots are trained to the best capabilities possible and the highest standards, and I have full faith that they’re getting that at the 162nd. And I look forward to when they will eventually be deployed.

NV: Sometimes it’s difficult to understand why the United States has been so reluctant to disburse more military aid to Ukraine given the vast stockpiles of equipment the federal government maintains. Why do you think Washington has struggled with providing Kyiv with arms in quantities sufficient to turn the tide of the war?

Smith: It’s a good question, one that we often discuss with policymakers in D.C. as they control the authority and ability for U.S. industry to be able to export.

But I would say, however, speaking on behalf of industry that I represent through the defense coalition, I can share that, like many companies that we see in Ukraine today, it’s really hard for U.S. companies to keep up with demand, not just from Ukraine, but from the U.S. government and our allies.

What may be surprising is that even though there are large stockpiles, a lot of this equipment is already committed to contracts that have been in force for the last three to seven years.

Read also: Ukraine’s drone production vs Russian capabilities – UAV developer interview

I’m speaking with one company in Arizona about how they could potentially support Ukraine, they actually were fully booked for the next three years before the war even broke out. But what I would say is that a lot of these companies are now looking to see how they can potentially put orders for other countries on hold or delay those orders in order to reprioritize the requests coming out of Ukraine.

So, companies are definitely doing what they can. But production in the U.S. has been an issue, I think, for multiple years, and then obviously just increased demands, not just from Ukraine, but other allies abroad has definitely put a major strain on our ability to keep up with the demand that’s coming in.

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