The war in Ukraine has transformed BAE Systems Hagglunds from a struggling post Cold War manufacturer into one of Europe’s fastest growing defence producers, with output surging and orders rising sharply across the continent.
BAE Systems Hagglunds, based in the small northern Swedish town of Örnsköldsvik, has seen its fortunes dramatically reversed as European governments ramp up military spending in response to Russia’s invasion of Ukraine.
The company, owned by British defence giant BAE Systems since 2004, traces its roots back to a 19th century family business that originally made furniture before expanding into buses, trams, aircraft and later armoured vehicles in the 1950s.
Following the end of the Cold War, reduced defence demand pushed the firm into crisis. By 2012, new managing director Tommy Gustafsson Rask was forced to cut a third of the workforce as demand weakened and the industry contracted.
“I think the 2014 annexation of Crimea was when we saw something starting to happen,” Gustafsson-Rask said, speaking at the company’s test track in Örnsköldsvik, noting that business momentum accelerated further ahead of Russia’s full scale invasion of Ukraine in 2022.
Since 2020, production has increased by around 400%, while staffing levels have risen from about 800 to 2,600 employees, turning the firm into the largest employer in the town of roughly 56,000 people.
At the centre of this growth is the CV90 infantry fighting vehicle, a fifth-generation armoured platform designed to carry a crew of three and up to eight fully equipped soldiers. The vehicle has now sold more than 1,300 units, with over 600 additional orders in the pipeline.
Widely deployed by European militaries and now battle-tested in Ukraine, the CV90 has become one of Sweden’s most successful defence exports. The company is also targeting new contracts for up to 500 additional units from five European countries.
Reports from Ukraine suggest strong battlefield performance, although drone threats remain a concern. Ukrainian officials have credited the vehicle with protecting troops, with President Volodymyr Zelenskiy personally thanking Gustafsson-Rask during a visit to Sweden.
“He came forward, hugged me, and told me that your CV90s are saving our soldiers’ lives, and I get goosebumps even now,” he said.
The CV90, which costs about $10 million per unit, has now been sold to ten European countries. Sweden itself, which joined NATO in 2024 after more than two centuries of military non-alignment, has become the European Union’s seventh largest arms exporter, according to the Stockholm International Peace Research Institute.
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