Ukraine Turns to Allies to Keep Embattled Defense Industry Going


Russia has targeted Ukraine’s defense industry, from tank plants to logistics facilities, with more than 100 missile strikes since Russian President Vladimir Putin ordered a full-scale invasion of Ukraine in February. Ukraine’s GDP is expected to fall by more than a third. And meanwhile, Ukraine has had to learn how to service and maintain new NATO weapons coming into its arsenal from Western countries.

But nearly seven months after the invasion aimed at toppling the government of Ukrainian President Volodymyr Zelenskyy, the country’s defense industry — one of the most robust in the former Soviet Union — has kept chugging along, according to experts and Ukrainian officials. It is doing so in part by moving defense manufacturing plants to safer locations, mandating new arms manufacturing deals with European allies like Poland, and government-mandated creation of new defense manufacturing jobs.

Yuriy Guzev, head of Ukraine’s state-owned arms manufacturer Ukroboronprom, said foreign policy in an interview that Ukraine is working on offshore production with some companies from abroad. But as Kyiv increasingly receives NATO-grade weapons — more than $15 billion worth from the United States alone since February (nearly triple last year’s defense budget) — Ukraine is trying to build facilities to service those weapons, and will increasingly a part of the western military supply chain.

Russia has targeted Ukraine’s defense industry, from tank plants to logistics facilities, with more than 100 missile strikes since Russian President Vladimir Putin ordered a full-scale invasion of Ukraine in February. Ukraine’s GDP is expected to fall by more than a third. And meanwhile, Ukraine has had to learn how to service and maintain new NATO weapons coming into its arsenal from Western countries.

But nearly seven months after the invasion aimed at toppling the government of Ukrainian President Volodymyr Zelenskyy, the country’s defense industry — one of the most robust in the former Soviet Union — has kept chugging along, according to experts and Ukrainian officials. It is doing so in part by moving defense manufacturing plants to safer locations, mandating new arms manufacturing deals with European allies like Poland, and government-mandated creation of new defense manufacturing jobs.

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Yuriy Guzev, head of Ukraine’s state-owned arms manufacturer Ukroboronprom, said foreign policy in an interview that Ukraine is working on offshore production with some companies from abroad. But as Kyiv increasingly receives NATO-grade weapons — more than $15 billion worth from the United States alone since February (nearly triple last year’s defense budget) — Ukraine is trying to build facilities to service those weapons, and will increasingly a part of the western military supply chain.

“From February 24, we will work around the clock,” Gusev said. “We replaced some of our companies due to security issues and missile attacks. We are working with partners to create servicing and repair facilities for Western weapons and equipment here in Ukraine.” The potential for more servicing facilities could spur Western nations to send weapons and equipment to Ukraine more quickly as NATO members move Worried about sending things that the war-torn country cannot easily maintain.

“We hope that we will be part of the production line,” Gusev added, also calling for joint research and development centers with Western companies.

Even when Ukraine was under attack and some facilities were shut down, the country cleverly adapted, using small workshops and moving production abroad to avoid Russian strikes. Gusev also said companies have tried to hire more and raise salaries to keep defense workers in jobs; Even during World War II, the United States struggled with absenteeism and worker strikes at many major defense contractors.

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“Necessity is the mother of invention,” said Jeb Nadaner, former US Assistant Secretary of Defense for Industrial Policy. “They have very active networks in Europe and even beyond to advance their workshops.”

During World War II, the United States diverted more than 40 percent of its GDP to fighting Germany and Japan, and supplied arms to Britain, the Soviet Union, and others through the Lend-Lease program. Though Ukrainians are under attack at home and have had a similar percentage of their economic output destroyed by Russian attacks, the mix of older Soviet-era factories allows for quick repairs and remodeling. “They have the remains of an older industrial base,” Nadaner added. “Think of New York, New Jersey, 1965. They have cabins. You have people who can fabricate things.”

And as retreating Russian troops leave behind increasingly sophisticated weapons – including tanks, armored vehicles and assault rifles – Ukraine has instituted procedures to modify these weapons and use them against their manufacturers. A Ukrainian military official said foreign policy last week that Ukraine had captured more than 200 vehicles in its push into the Kharkiv region near the Russian border.

“We have special research institutions that are discovering all this Russian equipment and weapons, and we have our own design bureaus that are looking for this military equipment and weapons from Russia,” Gusev said. However, he emphasized that the long game for Ukraine is to receive foreign technology transfers, for example from the United States, and to create joint ventures with global defense companies to create more efficient weapons.

The country’s parliament, the Verkhovna Rada, is also considering a new bill that would make the defense industry a priority industry to attract more investment.

But even with impoverishment and the potential for foreign aid, there are serious threats to keep production going. The damage to Ukraine’s defense industry is only a fraction of the war-torn country’s upcoming reconstruction bill. Volodymyr Omelyan, a former Ukraine infrastructure minister, said the total amount of Russian damage to the country is more than $1 trillion, but warned that the figure is a rough estimate as fighting continues to wreak havoc on Ukraine’s infrastructure dish.

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“We are still able to produce many types of weapons, but you definitely can’t build a real production line under the constant threat of bombing,” Omelyan said. He added that the Ukrainian government should try to reach offshore agreements with neighboring NATO countries such as Poland and Slovakia and produce artillery shells and missiles with the help of Western countries – with the guarantee that these facilities will then return to Ukraine would war.

A Ukrainian military official, who wished to speak on condition of anonymity about the ongoing production effort, said the government has also begun to highlight arms production facilities in Ukraine’s western reaches — further away, though not entirely, from possible Russian missile strikes. (Much of what was then the Soviet Union moved its industrial base east across the Ural Mountains to keep it out of reach of Nazi invaders.) This month, Zelensky said the Turkish firm was responsible for manufacturing the low-cost Bayraktar TB-2 it used. Drones used extensively against Russian tanks early in the war, a factory is set up in Ukraine to build unmanned aerial vehicles.

Experts believe that Ukraine’s defense industry can exist in combination with low workshop production. “Lots of workshops, lots of motivation,” said Nadaner. “It’s not a replacement for who we areGiving them is no substitute for significantly increasing our defense budget… but what they have kept is working with a much larger production [level] than before the war.”



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