21-07-2025
French defense industry faces challenge of ramping up production
Are the logistics keeping pace? Three years after President Emmanuel Macron announced a shift to a "war economy," following Russia's invasion of Ukraine, France's arms industry has struggled to scale up. The significant increase in defense spending Macron announced on July 13 will be essential to support this transition. However, moving from a production model designed for peacetime to a military-industrial complex suited to the new geopolitical context is not only a matter of financial resources, but also of organization.
The challenge essentially lies in changing both the scale and the pace of production, which requires a complete overhaul of existing processes. Until now, the prevailing production processes had focused on just-in-time, small-batch manufacturing, intended either for the Defense Ministry or for export, with relatively relaxed delivery deadlines. Yet a war economy demands mass production and regular output within tight deadlines. Years of underinvestment, economic rationalization and sporadic orders have weakened France's industrial base, which now needs a profound transformation, on both a qualitative and a quantitative level.
Efforts to ramp up production toward this wartime model have come up against several obstacles in recent months. Without solid orders, manufacturers have been unable to invest in new production capacity, which is now almost entirely saturated. The orders given to major defense groups by the Directorate General of Armement (DGA) the French military procurement agency, were disrupted by the delays to the vote on the 2025 budget. This situation is now in the process of being resolved. In addition to this delay, some accounting practices have created further hurdles for companies. For example, the practice of "deferring expenses," in which the DGA only pays for equipment that has already been delivered the following year, has hampered the expansion of production facilities.
Coordination at the European level
Another blind spot is the fragility of France's defense industrial and technological base, which consists of thousands of small and medium-sized enterprises (SMEs) and midsize companies. Large groups such as Thales, Safran, Dassault and KNDS depend on a network of subcontractors who lack a clear view of orders, access to funding and support for hiring or investment. If major leaders and public authorities do not step up efforts to protect and strengthen this ecosystem, the entire sector could break down. Yet, as it stands, the support mechanisms that exist are still fragmented, slow and difficult to understand.
Finally, this strategy cannot succeed without better coordination on standards, requirements and industrial priorities at the European level. If each European Union member state continues to develop its own equipment and munitions independently, without at least some degree of resource sharing, Europe's collective effort risks being diluted and ultimately losing effectiveness. The fact that joint projects, such as the future tank (MGCS) or air combat systems (SCAF), have become bogged down by national rivalries and political inertia bodes ill for the future.
A war economy is not just about producing more; it also means making decisions faster, anticipating challenges better and coordinating efforts at the national and European levels. Unless these conditions are met, the ramp-up of France's defense industry will remain little more than wishful thinking.
