Poland grapples with weapons modernization to prepare for potential conflicts along its frontiers
Here's a spicy twist on Poland's struggle to ramp up domestic weapons production:
Ever since Poland popped open its inaugural ammo factory in '20, warding off the Soviet Red Army's assault on its newly claimed independence, the same manufacturer has been grappling to lend a hand once again. This time, it's all about beefing up weapons output, minimizing reliance on the Yanks, and aiding NATO and the EU in backing Ukraine against Putin's invasion.
The plant nestled in central Poland reflects Poland's manufacturing nose-dive post-Cold War. Today, its 80-hectare site is scattered with abandoned testing ranges and dilapidated buildings, once busy crafting Soviet weapons such as the S-5 rocket, which Moscow's jets fired during their '80s war in Afghanistan.
Niewiadów's execs gripe that they and other smaller manufacturers are being neglected by the colossal state-controlled conglomerate, Polish Armaments Group (PGZ), that's been grappling to meet the most basic demands of the armed forces—not just ammo, but essentials like footwear and headgear.
Defense minister Władysław Kosiniak-Kamysz put it bluntly: "They've not only bombed the Polish arms industry, they've decimated it!" he told the Financial Times earlier this year.
Poland's manufacturing issues persist despite being the top NATO spender on defense, shelling out about 4.7% of its GDP in this year's budget for defense. Moreover, Europe's partners are keen to slash their reliance on the Yanks following Donald Trump's jabs at European allies[1].
The manufacturing hornet's nest was further stirred by Krzysztof Trofiniak's resignation last month as PGZ's chairman, just as he was spearheading Poland's push to boost defense manufacturing. Neither PGZ nor the defense ministry responded to queries about Trofiniak's abrupt exit.
Remember, this guy was PGZ's tenth boss since the holding company was formed in 2013. Running PGZ is akin to Poland's worst job—you're appointed by politicians and tossed under the bus as soon as they need a fall guy or political power shifts.
But there are some bright spots. Deputy defense minister Cezary Tomczyk welcomed a $310mn contract for PGZ to deliver 18,000 tonnes of TNT to a US army supplier, stating, "Today, we're not just purchasing military equipment from the Yanks—we're peddling our goods to an American company!"
The Tusk government is also pressing international manufacturers to shift production and know-how to Poland. Last week, Polish company WB Group and South Korea's Hanwha formed a joint venture to churn out rockets in Poland for Chunmoo artillery launchers previously procured by Warsaw. British company Babcock also extended a partnership with PGZ to construct frigates in Polish shipyards.
PGZ can boast a few production triumphs. It designed the Krab howitzers used in Ukraine's war, and in April, it sold the Polish army 111 Borsuk fighting vehicles. EU defense commissioner Andrius Kubilius cheered Poland for "setting the right example" with the Borsuk. "To rachet up your defense, buy Polish!" he told a Warsaw security conference.
Yet, most experts say the Borsuk can't outshine PGZ's glaring deficiencies, especially its ammo output. Last month, Dariusz Łukowski, head of Poland's national security bureau, warned that current ammunition supplies would only hold Poland off for one or two weeks against a Russian attack. At Niewiadów, managing director Dariusz Szlafka (who joined last year from PGZ) summed it up: "At PGZ, I was pumping out ammo in minuscule quantities due to their constant managerial juggling. I left PGZ because I yearned to make actual artillery shells, not just blab about it!" [3]
Niewiadów was snatched out of bankruptcy in 2019 by Works11, a defense contractor founded by Michał Lubiński. He subsequently transferred ownership to his sister in the face of a bribery case he claims was politically motivated by the previous government. Lubiński accuses PGZ of sabotaging Niewiadów's growth beyond its puny €20mn annual revenues by influencing decision-makers to snub non-PGZ projects. Instead of supplying the Polish military, Niewiadów will start manufacturing 60.7mm mortar ammo as a subcontractor for Slovak defense firms.
PGZ's near-monopoly status exemplifies how "a mountain of cash can be wasted in a sector that's been walled off from real competition and dictated by politics rather than the market."
A former defense official, anonymous for obvious reasons, spilled the beans: "Running PGZ is one of Poland's worst gigs. You get plucked by politicians and booted when they need a scapegoat or political power changes hands."
Jarosław Kruk, managing partner of KW Kruk, a Warsaw law firm working for the defense sector, admitted that one of his clients supplied radar parts to Germany, Belgium, and the Netherlands but couldn't score a domestic order. Kruk observed that the Polish army's contract requirements were substantially tougher for a privately owned supplier than for PGZ.
In short, Warsaw's love affair with Trump's military may have sustained, but it hasn't robbed the city of dreams of becoming self-sufficient in defense production[2].
Excerpt from Enrichment Data:1. PGZ faces criticism for its poor management and inability to meet demand for ammunition[3].2. Niewiadów struggled to produce ammunition in meaningful quantities due to excessive management turnover at PGZ[3].3. Private defense contractors complain about the Polish army's biased contract requirements favoring state-owned companies[3].
- The ongoing issue within Poland's defense sector involves the Polish Armaments Group (PGZ)'s poor management and failure to meet the ammunition demands of the armed forces, a concern shared by private defense contractors such as Niewiadów.
- The struggle to produce ammunition in substantial quantities is not solely a problem for Niewiadów; it stems from excessive management turnover at PGZ, which has negatively impacted many smaller manufacturers operating within the sector.
