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DEFENCE I OFFSET

Jarosław Kruk 

THE FUTURE OF THE POLISH DEFENSE INDUSTRY – THE SHOW IS GOING ON

20/03/2013

From the circles considered close to well-informed sources and to the media more and more new information on the planned consolidation of the Polish arms industry is leaking. The Deputy Minister of the Treasury, Rafał Baniak praises Bumar and repeats that this is not a profit generated by means of accounting tricks. It is a fact that Ministry of Treasury and the Ministry of Economy rather opt for the implementation of the past governmental plans and defense industry consolidation around Bumar. The Ministry of National Defense is against, but in the management department of the Ministry rumors can be heard on different views on this issue.

An excellent website www.wnp.pl describes the history of HSW and concurrently points to the opposing camps. Ms Renata Butrym, head of the Subcommittee for the Modernization of the Armed Forces is among leading advocates of establishing the defense concern. Everything seems to be leaning toward HSW, except for the lack of one export.

Rzeczpospolita, in turn, cited the words of General Waldemar Skrzypczak, who stated that: “(…) in the army, despite efforts, Bumar was unable to build an exemplary brand. The company also fails to improve the image abroad, which is detrimental to the Polish weaponry export.” Moreover a new concept has been indicated, the motto of which would be the construction of a new concern, composed of product groups – autonomous with respect to the headquarters, the name of which would not be Bumar, and its activity would be limited to ownership supervision and strategy development. The following would also be set up: a defense group , a munitions group , an electronic group and Cenzin that would deal with export. And the first question arises at this point: what about the air force, where would WZLe go?

The General’s opinion provokes to think about a few issues. As regards the position of Bumar in the army, I cannot express my opinion because I don’t have relevant data. As for improving the image abroad – it is very difficult. Bumar’s activities in foreign markets from the beginning of 2007 – apart from those from March 2012, because I have no knowledge about them – could only bring joy and a kind of embarrassment to those skilled in the trade in arms from 27 Stromynka Street. The joy because finally they can start a party, because the opponent destroyed himself without any expenses on their part. Embarrassment, because the expenditure of budgeted amounts for the fight with the opponent must somehow be justified. Let’s face it, in the main export markets we are moving largely in the same product category, taking into account the proportions, of course. In my opinion, the idea of resigning from a contract for theWZT-3 was wrong, soon it can have strongly negative consequences for the Polish defense industry.

An idea described by Rzeczpospolita is interesting. I like it, especially that the need for export of weaponry and others has been understood, and that finally Cenzin’s leading role with this respect has been emphasized.

There is only one matter that remains unsettled. In Poland we have not developed the holding law. Each company is expected to be profitable and work for its benefit, and not for the benefit of a holding. Therefore, I fear that the above idea will not work. Every company and/or group will work autonomously, and the concern strategies will be no reason for them to worry. The question arises whether there is time for the simultaneous formation of the holding law and the defense industry transformation? Why not make a defense breakthrough and, apart from Bumar, establish another group with the majority stake of private capital or even with a prospect of soon becoming public that would include HSW , WZLe, etc.? Maybe it is a good idea to implement English solutions and partly German, too. One should not be afraid of private capital in the defense industry. This capital has shown its development and export potential. The recent successes of a well-known manufacturer of drones in the Scandinavian market have been widely applauded.

 

 

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