Visibility for manufacturers, simplification of standards, securing supply chains, recruitment, financing... The transition to a war economy is a monumental undertaking. It is a project led by the French Defence Procurement Agency, its many entities and the 4,000 companies that make up the Defence Technological and Industrial Base (DTIB). For the past two years these different players have been coordinating and adapting to enable France to sustain a war effort over the long term, if necessary for its armed forces or for the benefit of a partner such as Ukraine.

Full order books

"The aim is for industry to be able to invest in its production system over the long term," said Alexandre Lahousse, head of the French Defence Procurement Agency's industrial affairs and economic intelligence department, on 9 February 2023 at the French Ministry of Defence's press briefing. The 2024-2030 military planning law has given DTIB manufacturers seven years' visibility, with a budget of €413.3 billion. This budget represents an additional €118 billion compared with the previous military planning law. The main effect of this significant budget increase has been to increase the volume of orders placed with manufacturers. From an average of €9.5 billion a year between 2012 and 2016, orders have risen to €20 billion by 2023. They have more than doubled in nine years.

By way of example, orders pending delivery amounted to €6 billion for Thalès, €5 billion for Dassault Aviation, €3 billion for MBDA and €1.5 billion for KNDS France on 31 December 2023.

Producing more and faster

To respond to the imperative to "produce more and faster", DITB companies have reorganised. That was made possible by the introduction of new technologies in the factories, the renegotiation of contracts for certain equipment, support for DITB companies as well as standardisation measures taken with the military planning law and pertaining to the level of priority set for each order. The merit of this production-oriented approach is that it has strengthened the links between the French Defence Procurement Agency and the DTIB around key projects, such as simplifying standards and diversifying procurement methods. Numerous working groups have also been created to share working methods and identify any bottlenecks on production lines. 

Over the past two years many companies have managed to significantly accelerate their production rates. This is particularly the case of KNDS France, which has halved production times for its Caesar howitzers while tripling the volume of units produced. The same goes for Thales, which has reduced the production time for its radars from 18 to 6 months, and for Dassault Aviation, whose factories were able to produce one Rafale fighter jet per month by 2022 (compared with three today).

Securing our supplies

In order to be ready in case of conflict and to improve production capacities, the French Defence Procurement Agency is also coordinating the relocation of certain critical productions. A case in point is the production of propellant powder used in the 155mm modular charges that equip the Caesar howitzers used by Ukraine in its war against Russia. Since the beginning of the conflict France has delivered 30,000 shells of this type to Kiev. The goal for 2025 is to deliver 80,000 units. On 22 February 2023 Eurenco announced the relocation of a powder factory to its Bergerac site. Backed to the tune of ten million euros by the French Ministry of Defence, the company should have sovereign production capacity in this critical segment by 2025. In all, eleven relocation projects have been launched by the French Defence Procurement Agency, and a twelfth has been identified for imminent implementation.

At the same time, the 2024-2030 military planning law provides for requisition measures, the establishment of priorities and the obligation to build up stocks. They are currently being translated into regulations and will allow the major industrial defence contractors to build up minimum strategic stocks. Within this framework, the French Defence Procurement Agency has worked closely with the companies to define these stocks, which concern materials, components and semi-finished products as well as spare parts necessary for the operational maintenance of weapon systems in service.

Recruitment difficulties

Another challenge lies in human resources. Despite increased hiring at MBDA and Thales, two companies with significant resources, the subcontractors are currently weakened by recruitment difficulties. These companies, which are often small and medium-sized enterprises (SMEs) and form the core of the DTIB, are supported by the French Defence Procurement Agency to avoid “bottlenecks” and the slowdown of the whole production chain. Among the measures implemented: the creation of an observatory of DITB professions and the launch of a national survey of human resources needs. Another action in favour of employment is the deployment of the Defence Industrial Reserve, under military status and led by the French Defence Procurement Agency. In the event of a major commitment, its role will be to step up production rates and reduce lead times at short notice. The Defence Industrial Reserve would then represent a pool of skilled reservists. By way of example, several partnership agreements have been signed with manufacturers: Naval Group, KNDS France, Arquus, SCANIA France, Verney-Carron and Geo4i.

Discussions are currently underway with all the major industrial contractors for a gradual entry into this system in the coming months. Ultimately, a pool of 3,000 defence industry reservists will be able to be deployed with BITD or state-owned manufacturers (SMITer[1] , SLM[2] , SIAé[3] , SIMU[4]).

[1] For the land-based industrial maintenance department.

[2] For Service logistique de la Marine.

[3] For the aerospace industry.

[4] For Service interarmées des munitions.

Kévin Savornin