Poland’s defense industry struggles to cut US reliance and support Ukraine

Despite record military spending, Poland’s defense sector faces setbacks from mismanagement and reliance on U.S. arms, hampering efforts to support Ukraine.

Polish servicemen display M1A1FEP Abrams tanks on Wislostrada in central Warsaw during a military parade marking Polish Army Day on August 15, 2024. Photo by Dominika Zarzycka/SOPA Images

By Anna Fadiah and Hayu Andini

In 1920, as Poland fought for its newly regained independence against the advancing Soviet Red Army, the country opened its first ammunition factory. That effort marked a critical step toward creating a sovereign military capability. One hundred years later, the same plant in Niewiadów is struggling to play a similar role amid new threats from Russia and a changing defense landscape in Europe.

At the heart of the story is how Poland’s defense industry struggles to meet growing military needs, decrease reliance on American weaponry, and support Ukraine in its fight against Russian aggression. While Warsaw has committed more than 4.7 percent of its GDP to defense—leading NATO in military expenditure—its domestic arms production is plagued by inefficiency, overcentralization, and a lack of competition.

A decaying legacy and an uncertain future

The Niewiadów plant, located in central Poland, is emblematic of these problems. Once a vital producer of Soviet-era munitions, including S-5 rockets used in Afghanistan, the facility has been reduced to a shadow of its former self. Its grounds are scattered with crumbling buildings and abandoned testing fields—a visual reminder of decades of decline following the end of the Cold War.

According to the factory's managing director, Dariusz Szlafka, the site has suffered from years of neglect and political interference. He previously worked for the Polish Armaments Group (PGZ), a state-owned conglomerate that controls most of the country's defense production. He described PGZ’s operations as producing "homeopathic quantities" of ammunition and said management changes made it nearly impossible to plan long-term projects, such as a 155mm artillery shell facility first discussed in 2014.

“I left PGZ because I wanted to actually produce 155s, not just talk about it,” Szlafka told reporters.

PGZ’s dominance and its consequences

PGZ’s near-monopoly has become a central obstacle to reform. Since its creation in 2013, the group has cycled through ten CEOs, the most recent being Krzysztof Trofiniak, who resigned after only a year without public explanation. Defense analysts argue that the group is often a tool of political patronage rather than effective strategy.

“Running PGZ is one of Poland’s worst jobs,” a former defense official said anonymously. “You’re picked by politicians and removed when power changes hands.”

The company’s inefficiencies extend beyond weapons production. The Polish armed forces have experienced shortages not just in ammunition, but also in basic equipment like helmets and boots. Many smaller firms, including Niewiadów, complain that they’re being shut out of the procurement process, even as they struggle to modernize and expand.

Government rhetoric versus procurement reality

While the government led by Prime Minister Donald Tusk has vowed to reinvigorate domestic arms manufacturing, critics say those promises often clash with procurement decisions. Poland continues to purchase large quantities of U.S. military equipment, including a $2 billion expansion of its Patriot missile system and a $1.3 billion deal for air-to-air missiles.

Defense Minister Władysław Kosiniak-Kamysz admitted that the previous government had failed to develop the arms industry. Still, insiders say current officials are also reluctant to open up the market to private competition.

Rafał Brzoska, a billionaire entrepreneur and government adviser, argued that the reliance on state-owned firms is holding Poland back. “In the U.S., the F-35 and everything else is made by private companies,” he said. “In Poland, nothing has been produced by private business.”

International deals and minor victories

Despite widespread dysfunction, some successes have emerged. PGZ recently landed a $310 million contract to supply 18,000 tonnes of TNT to a U.S. military supplier. Deputy defense minister Cezary Tomczyk touted the deal as a reversal of previous trends.

“Until now, we have been announcing that we are purchasing military equipment from the US — today we are the ones selling our products to an American company,” he said.

Poland has also secured international partnerships. WB Group joined forces with South Korea’s Hanwha to produce rockets domestically for the Chunmoo launcher, while British company Babcock expanded its shipbuilding collaboration with PGZ.

PGZ has achieved some technological milestones as well, including designing the Krab howitzer used by Ukrainian forces and delivering over 100 Borsuk fighting vehicles to the Polish army. EU defense commissioner Andrius Kubilius praised Poland for “showing the right example” by sourcing its weapons domestically.

Persistent production shortfalls

Still, these achievements are overshadowed by glaring gaps in ammunition supply. Dariusz Łukowski, head of Poland’s national security bureau, warned that current reserves would sustain only one or two weeks of combat in the event of a Russian attack.

Meanwhile, Niewiadów will begin producing 60.7mm mortar rounds this summer, not for the Polish army, but as a subcontractor for Slovak firms. Its annual revenue remains modest at around €20 million—a figure owner Michał Lubiński blames on PGZ’s lobbying against non-state projects.

Lubiński, currently battling bribery allegations he claims were politically motivated, said PGZ’s monopolistic behavior wastes public money and stifles innovation. “A lot of money can be wasted in a sector that has been isolated from real competition and driven by politics rather than the market,” he said.

Private firms left in the cold

Private defense contractors face steep hurdles in winning government contracts. Jarosław Kruk, a lawyer representing several such firms, noted that one client sells radar components to NATO members like Germany and the Netherlands but cannot break into the Polish market. He claimed that domestic regulations are at least three times more restrictive for private companies than for PGZ.

“Our lovely Polish army believes that only state-owned companies can meet its needs,” Kruk said. “PGZ has always promised whatever the politicians and the army people want, but it’s mostly been only promises.”

Deputy Minister Tomczyk has announced a target for Polish manufacturers to receive 50 percent of the military procurement budget. Experts say achieving that goal would require a wholesale change in how defense contracts are awarded—and a genuine commitment to opening the market.

Stuck between ambition and dependency

Poland’s defense ambitions remain high. But for now, Poland’s defense industry struggles to keep up with rhetoric, let alone match the output of Western arms giants. Despite growing insecurity in Europe and increasing pressure to support Ukraine, Warsaw remains heavily reliant on American suppliers. For all the speeches about sovereignty and local production, deals with U.S. firms still dominate.

“Our politicians can give public speeches about making everything more Polish,” Kruk said. “But when they get the private call from Washington, they will sign the contract with the US.”

Poland’s predicament highlights a broader challenge for Europe’s defense sector: how to balance autonomy, efficiency, and alliance obligations. Without structural reforms and real competition, Poland’s efforts to become a military powerhouse may remain more aspiration than reality.