France and Germany agreed to co-produce military equipment in Ukraine. At a meeting in Berlin on Friday, March 22, between French Minister of the Armed Forces Sébastien Lecornu and German Minister of Defense Boris Pistorius, the two European capitals reached an agreement that paves the way for the first French-German arms factory on Ukrainian soil.
The agreement concerns the KNDS military land systems conglomerate, which brings together Germany's Krauss-Maffei Wegmann (KMW) and France's Nexter Systems, maker of the CAESAR howitzer. The two companies have agreed to open a subsidiary in Ukraine that will first produce spare parts and ammunition and then, eventually, complete weapon systems.
The creation of this subsidiary is primarily intended to facilitate the return to operational condition of military equipment already delivered by KNDS and damaged by the war – for example, KMW's Leopard tanks and Panzerhaubitze 2000 howitzers and Nexter's famous CAESAR howitzers. The idea is to prioritize Ukranian manufacturing of the parts that break down the most quickly and thereby "simplify logistical issues," as Lecornu's team put it on Friday.
However, on Friday, Lecornu and Pistorius remained evasive about the timeframe in which this subsidiary could see the light of day, above all for security reasons. The pace could be rapid, with several sources suggesting sometime in 2024. Discussions are still underway to define, on both the German and French sides, how best to "integrate" the various projects in the pipeline, especially with Ukrainian joint ventures.
For Nexter, the most symbolic project concerns the creation of a specific support center for CAESAR howitzers, which has been on the drawing board since September 2023. This is an important issue at a time when, as part of the restructuring of aid to Ukraine – launched from the outset at the EU level in close coordination with the United States – France is attempting to take the lead in artillery by boosting exports of its flagship product.
Since the start of the war, Kyiv has already received almost 50 CAESARs (including 19 from Denmark). The Ukrainians have just bought six more with their own funds, while Paris announced in January that it was ready to pay for another 12 out of a total production capacity of 72 for the coming year. "It's a powerful symbol," said Nexter.
The opening of this subsidiary is also the first materialization of the announcements made by French President Emmanuel Macron on February 26 in Paris, where all allies met to define priority projects for Ukraine. Among these eight priorities, which include cyber defense, mine clearance and the protection of Kyiv's borders, is the development of industrial production in Ukraine.
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