Mitsubishi Heavy Industries (MHI), Japan's largest defense contractor, has warned that converting struggling auto plants into military drone production bases "will fail and only waste taxpayer money."
According to the Financial Times, MHI Chief Executive Officer Eisaku Ito said the company will play a leading role in Japan's drone business. However, he expressed a critical stance toward plans to convert idle plants into drone production facilities, citing the fundamentally different production methods of cars and drones.
Earlier, Japan's Ministry of Defense nearly tripled its unmanned aircraft procurement budget for this fiscal year to 277 billion yen (about 2.6 trillion won). As a result, overseas drone manufacturers and local startups are competing fiercely to enter the Japanese market.
"Honestly, I felt those remarks were made by people who don't properly understand this field," Ito said. He added, "Products in this field constantly change specifications depending on the situation, but auto plants are designed to make the same product in the tens of thousands to millions of units."
In fact, several European automakers are accelerating efforts to convert plants with low utilization rates or facing closure into factories for drone and missile components. Under encouragement from the French government, Renault has signed successive drone production agreements with aircraft company Turgis Gaillard and defense firm Thales. Volkswagen is in talks for a partnership with the maker of Israel's "Iron Dome" air defense system, while Mercedes-Benz plans to produce drones in partnership with Titan Technologies.
"Using the same kind of plant as those for cars to make military drones is a terrible idea," Ito said, warning of the risk of mass-producing useless, obsolete products. "If that happens, it will end up as an enormous waste of taxes," he added. "We cannot afford that."
Ukraine Reshaped the Battlefield: Can Japan's MHI Become the 'Drone Shield' Near Taiwan?
Japan, inspired by Ukraine's use of cheap drones to fight Russia, plans to deploy drones on a large scale to secure an asymmetric advantage over potential adversaries such as China. At its center is the "Shield" coastal defense program, which would deploy thousands of drones to defend southwestern islands near Taiwan.
Ito predicted MHI's drone business would grow to a "considerable scale." He stressed that the company, specialized in small-batch production of diverse products, could become Japan's top drone supplier.
He predicted that, due to data security concerns, the Ministry of Defense would want Japan to independently develop and produce some drones without overseas partners. This, he explained, works in MHI's favor. Citing the company's ability to produce munitions across sea, land and air, he said, "We are the only company in Japan that can handle this comprehensively."
MHI recently developed a prototype interceptor drone capable of shooting down enemy unmanned aircraft in just three months, leveraging its expertise in satellites, command-and-control systems and submarines. In the 15 months since Ito took office, the company's stock has risen 50%. It is enjoying a "generational boom" driven by rising defense spending and demand for gas turbines related to artificial intelligence (AI).
Ito faces the task of absorbing an order backlog expected to exceed 15 trillion yen (about 141.4 trillion won). To that end, he is pursuing production expansion, including doubling gas turbine output. He argued that even if investment in AI data centers collapses as a bubble, the gas turbine boom would continue, driven by demand for replacing aging power plants, switching from coal to gas, and absorbing the output volatility of renewable energy.
