France's 'war economy' feels distant for French manufacturers

Armored vehicles drive down on the Champs-Elysees avenue during the annual Bastille Day military parade in Paris on July 14, 2021. - Copyright Michel Euler / AFP

By AFP

Published on 07/04/2023 - 15:48

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Though Macron called for a shift to a “war economy” following the Russian invasion of Ukraine, some manufacturers say that wish is yet to be fulfilled.

A few workers are busy around the assembly line of Caesar gun trucks, whose production has been relaunched after a one-year interruption at the Arquus factory in Limoges, a city in southwest France.

But the transition to a “war economy” that Emmanuel Macron called for remains a distant prospect.

“At present, a Caesar leaves our lines every four days”, explained engineering manager Christophe Bouny in front of four truck skeletons being manufactured.

“We could make one a day, but that's not the order we have” added Emmanuel Levacher, president of Arquus, which manufactures armoured vehicles for the French army.

France, which has supplied 30 Caesars to Ukraine, has placed an order for a batch of 18 replacements. Two more batches are to be produced this year — and that's it.

“It's not much,” said Levacher.

“What interests us is to have visibility on production,” he says. "What would be good is if we received an order for 109 trucks and not 12, then 15," a target set bynew French military programming law.

Levacher wants to avoid this “stop and go” approach at all costs because “it's always a challenge to restart production”, to retrain operators and to get suppliers back on board.

Restricted production

Manufacturer Arquus, a subsidiary of Sweden's AB Volvo, is a major player in the Scorpion programme, aimed at replacing the French army's armoured vehicles with high-tech, interconnected machines.

A little further into the factory, “mobility kits” for Jaguar reconnaissance vehicles and Griffon troop transport armoured vehicles, key parts of the programme, are being built.

Arquus only produces the chassis and wheels of these state-of-the-art vehicles, the volumes of which were revised downwards in the new military programming law (LPM) presented to the Council of Ministers on Tuesday.

Around 100 fewer Jaguars than the 300 planned for 2030 and some 500 Griffons were also postponed to post-2030.

“This is not necessarily good news for us,” said Levacher.

But he hoped to make up for it through “maintaining in operational condition” the VABs and AMX-10RCs, whose life span is set to be extended under the plans.

Vehicle maintenance and repair account for more than 40% of Arquus' turnover.

In 2022, the defence company produced 141 mobility kits for the Griffon and 25 for the Jaguar, but its production lines are not running at full capacity due to a lack of firm orders.

A turn to 'war economy'

Last June, the French president called for a shift to a “war economy” to prepare for the possibility of a high-intensity conflict following the invasion of Ukraine.

A wish that has yet to be fulfilled, said Levacher.

Though it built 1,272 new vehicles and was helped by the ramp-up of the Scorpion programme last year, Arquus' exports remain disappointing.

Selling only €100 million in exports, the company is still far from its target of achieving half of its turnover – €550 million – abroad.

And then, “there is the rise of competing players such as Turkey, South Korea, South Africa and Israel, which have growing might in the global weapons industry.

The Turks have very competitive prices because they have a government that gives them large orders,” according to Levacher.

“We are not desperate but reasonably concerned,” he added.

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