Europe wants to ramp up defence production but its factories ‘making machine guns by hand'

First Post

26-04-2025

Europe wants to build more weapons, faster but decades of underinvestment and outdated factories stand in the way read more
As tensions grow around the world and the US slowly pulls back from its long-time role as Europe's main security protector, leaders in Europe are hurrying to increase their defence production. US President Donald Trump has again focussed attention on how much Nato countries are spending on defence.
Trump has reminded Europe that it needs to take more responsibility for its own protection. Because of this, European governments are now promising to spend more on their military forces. But promises alone may not be enough.
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Europe's defence industry is split into many parts, often working on a small scale and using old production methods. These deep problems in the system might stop Europe from reaching its defence goals.
Trump's pressure and Nato's 2 per cent target
Trump has strongly criticised how little Europe spends on defence. His repeated warnings that the US might reduce its help unless Nato members spend at least 2 per cent of their GDP on defence have pushed many European countries to make new financial commitments.
For example, Belgium's budget minister, Vincent Van Peteghem, reportedly said in the Financial Times that Belgium is working to meet Nato's goal. They plan to do this with a mix of things, such as putting in more money, selling state-owned assets and borrowing from the EU's €150 billion fund. Still, he also pointed out that Belgium already has a lot of debt, so borrowing more could cause political problems.
Even though governments are promising to spend more, the actual production situation is more difficult. A detailed report by Laura Dubois in the Financial Times showed that Europe's small defence companies are not ready to quickly increase production.
One example is FN Herstal, a major gunmaker in Belgium and an important supplier to Nato. At this company, weapons are still mostly made by hand. The FN MAG machine gun, which is often used in Ukraine, is put together with great care.
Workers still file each metal piece by hand after it's cut by machine, before the gun is finally assembled. According to the company's spokesperson, Henry De Harenne, machines can do a lot, but human experience is still very important for some parts of the work.
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A fragmented industry struggles to adapt
What is happening at FN Herstal shows a bigger problem across Europe's defence manufacturing sector. The company's CEO, Julien Compere explained to the Financial Times that they are already using their current facilities as much as possible, but they do not feel confident enough to invest in major expansions.
Even though the demand for weapons has gone up because of the war in Ukraine and more orders from Nato, companies like Herstal are still having problems. They face issues like weak transport systems, a lack of long-term contracts and not enough financial support.
Compere said that although the company has increased its yearly production of the FN Minimi light machine gun from 3,000 to 4,500 units, this growth happened only by pushing their current systems harder—not by building anything new.
He also mentioned that the newer FN Evolys, which is a lightweight machine gun made with 3D printing, is still being produced in small amounts. The reason is that they don't have enough confirmed orders to support larger-scale production.
The main problem, according to Compère, is the lack of long-term planning. He reportedly said that once there is clear information about future needs, other challenges like getting materials and hiring staff can be solved.
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But without contracts that last for several years, Herstal and other companies do not have a strong enough reason to spend money on setting up more advanced and automated production systems.
The European defence puzzle
Even though different countries in Europe are promising to spend more on defence, the overall arms market in Europe is still very divided. As reported in the Financial Times, Compere pointed out that each country still prefers to focus on building its own local defence industry instead of working together across Europe. Because of this, companies struggle to grow big enough to become major players on a European level. Compere suggested that joint contracts and cross-border cooperation could help reduce waste caused by each country doing the same work separately.
Following this idea, FN Herstal has signed a 20-year contract worth €1.3 billion with the Belgian government for maintaining weapons and providing ammunition. Compere mentioned that talks are happening with France and other European countries to expand this type of deal. He views it as a first step toward better cooperation within Europe.
He also mentioned that mergers and acquisitions are part of their plans. FN Herstal already owns the US gun company Browning and is now in talks to buy Sofisport, a French company that makes shells. The company is also exploring new areas like artificial intelligence and drone technology.
These actions show that the company is aware it must change from a traditional, handmade-style factory into a modern and more varied defence business. However, Compere explained that these goals depend on getting clear rules and steady demand—two things Europe still hasn't fully put in place.
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Germany's high-tech turn
While some parts of Europe's defence industry still rely on old ways of working, other areas are moving forward with new technologies. Germany is one example. As reported by Handelsblatt, the German military, or Bundeswehr, has started a secret project called 'Uranos KI.' This project is focused on using artificial intelligence (AI) for real-time surveillance and analysing data along Nato's eastern border.
Handelsblatt reported that big defence companies like Airbus, Rheinmetall and Hensoldt are working on this project along with newer companies such as Quantum Systems and Helsing. Another company, Arx Robotics, which makes ground-based systems, is also helping with this effort.
The plan is to build a digital command centre that can combine drone video, radar signals and satellite images to give a full picture of the battlefield. The goal is for a small team of people to be able to monitor large areas and in the future, possibly send target information directly to autonomous weapons—though these systems would still need human approval before acting.
The project is considered so sensitive that even the selection process for who would work on it was kept secret. With at least €80 million in funding, the project shows that Germany is moving toward a defence system where software plays a bigger role than physical hardware. The idea is that adaptable software will allow military tools to change and improve faster than old-style equipment.
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The Helsing question: Innovation or hype?
One of the most interesting—but also debated—companies involved in the Uranos project is Helsing. This startup, which was founded in Munich in 2021, is now considered Germany's most valuable defence startup. According to reports, it has received €830 million in venture capital from investors such as Prima Materia and La Famiglia.
Helsing says it is leading the way in Europe when it comes to using artificial intelligence (AI) for electronic warfare. The company promises to change how battles are fought by creating smart algorithms that can recognise objects instantly, move on their own and even choose and follow targets.
However, not everyone agrees with this view. As Handelsblatt reported, many people in the industry have doubts about Helsing. Some insiders have said the company seems more like a 'marketing firm' than a true tech leader.
Critics argue that Helsing has not yet shown any major achievement in AI or software development and that it doesn't have access to the special training data needed for high-level military AI. In response, Helsing has claimed that it can build AI without using such data, but many experts are not convinced and say this idea is hard to believe.
Even with the doubts, Helsing's involvement in the Uranos project shows that Europe is ready to take risks and invest in new tech startups as it tries to modernise its defence systems. Whether these risky bets will succeed is still uncertain.
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Role of EU investment
The European Commission has noticed how serious the problems are and is now trying to create a more united strategy. There are plans to use €150 billion in loans and funding programmes to support the defence industry. This is part of a bigger plan to make defence production more efficient and much larger in scale. But turning these plans into real results is still a big challenge.
Countries like Belgium are dealing with hard choices. As the Financial Times pointed out, Belgium's plan to meet Nato's spending goals means they may have to sell off public assets and reduce welfare spending, which are politically difficult decisions. Other countries may also struggle with similar issues, depending on their financial situation.
On top of that, Europe's defence sector has suffered from many years of underinvestment. This has caused a shortage of engineers, old production systems and a heavy dependence on parts made outside of Europe. Fixing these problems will take a lot of long-term effort, serious political commitment and strong cooperation between European countries—something that has not been easy to achieve in the past.
What must change
If Europe truly wants to take control of its own defence, it needs to completely modernise its weapons industry. This means moving away from traditional, hand-crafted methods and building larger assembly lines that can produce more, more quickly. It also involves giving long-term contracts to suppliers and making sure that different EU countries are buying equipment in a more coordinated way.
Compere, the CEO of Herstal, asked the Financial Times what the 'new normal' would be that companies like his need to prepare for. Without clear answers, he said that companies will keep using short-term solutions, relying on old equipment and not enough skilled workers to meet growing demands.
Germany's Uranos project shows what a high-tech future might look like. But this project is not a typical example of the whole industry. For every AI-powered control centre being developed, there is still a factory in Belgium where workers are manually polishing machine guns. Closing the gap between these two very different realities is one of the biggest challenges for Europe as it tries to rebuild its defence strength.