One year into efforts to boost production of artillery rounds for Ukraine, the United States and Europe are seeing radically different results.
The U.S. has increased its output of 155mm shells far faster than it originally forecasted, and plans to increase it further—if Congress can pass a budget for the nearly two-month-old fiscal year. Europe has moved more slowly than it intended to, hampered by the consensus-focused nature of NATO and the EU.
And in a twist that belies Europe’s reputation for state-owned businesses, its dilemma is set by market conditions, while U.S. progress is made possible by state-control of ammo manufacturing.
It’s a “a bit of a chicken-and-egg question,” said Estonian Defense Minister Hanno Pevkur during a recent visit to Washington, D.C. Industry officials, Pevkur said, say, “‘Please give us contracts and then we can produce’ and then we say that, you know, ‘There is a clear demand. Just start to increase your production’.”
On the U.S. side, production doubled within a year of launching a crash production program, largely because the Army owns the facilities that make the shells.
“The U.S. Army has a pretty direct lever to increase the production of staple munitions like 155mm artillery shells,” said Rafael Loss, a European defense expert on the European Council on Foreign Relations.
Before Russia’s full-scale invasion of Ukraine in February 2022, the Army produced around 14,000 155mm rounds a month in government-owned, contractor-operated munitions plants. In December 2022, Army Secretary Christine Wormuth said the Army was looking to increase production to 20,000 rounds per month by the spring and 40,000 rounds per month by 2025.
Last March, Army Undersecretary Gabe Camarillo upped the target slightly, announcing plans to produce 24,000 rounds a month by year’s end.
The Army hit the target early, then exceeded it, producing 28,000 shells in October. At least some of those shells went right out the door to Ukraine, Army acquisition secretary Doug Bush told reporters in a media roundtable in November. He declined to say just how many.
Bush said the service now aims to boost its monthly production to 36,000 by March, 60,000 by September, 70,000 to 80,000 in early 2025, and 100,000 by the end of calendar 2025 — two and half times more than Wormuth’s year-old goal.
As part of this push, the Army has added shifts, bought robots, and expanded its ammunition plants, Bush said.
The Army’s investment has also been inexpensive relative to other Army programs, where $3 million can be considered a cheap price for certain advanced weapons, like hypersonic missiles.
The Army funded its original planned increase from 14,000 to 24,000 shells with $1.45 billion. In November, it announced a further $1.5 billion.
In November, Bush said the Army was counting on Congress to approve $3.1 billion for the effort in a 2024 supplemental-funding bill.
Congress, which has not yet agreed to fund the government past January, may not consider the bill until a longer funding resolution is passed. House Republicans, meanwhile, have become more and more leery of funding Ukraine,
Without that money, the Army will not meet its goal of producing 100,000 155mm rounds by the end of 2025, Bush said.
In Europe
The countries of the European Union began with a head start, producing about 230,000 155mm shells a year—about one-third more than the U.S. The EU also has a better recent record for approving annual spending plans.
By February 2023, European production was at 300,000 rounds annually, according to Estonian defense officials. By November, capacity had risen again, though assessments differ. European Commissioner for the Internal Market Thierry Breton suggested that Europe could now make some 400,000 rounds annually. Estonia’s Pevkur, speaking at a November media roundtable, put the figure between 600,000 and 700,000—and said it would reach one million rounds in 2024.
In March, the EU announced it would spend 2 billion euros ($2.2 billion) to send one million 155mm shells to Ukraine within a year. The money is split between paying countries to send stockpiled shells to Ukraine and acquiring new shells from EU members and Norway under a joint procurement scheme.
But the EU will not meet its goal this year, German Defence Minister Boris Pistorius confirmed recently. In September, Estonian defense official Kusti Salm said the plan would likely be fulfilled by mid-2024.
And in the long term, Pevkur said, even more shells will be required—to backfill stocks, support NATO regional plans, and keep Ukraine in the fight.
“My estimation is that we have to produce in the next ten years around 3 million rounds in a year,” the Estonian minister said.
NATO
NATO, whose own procurement agency is also pursuing the acquisition of more 155mm rounds, is finding that prices have quadrupled.
In October, NATO’s senior military officer, Adm. Rob Bauer, said that the price for one 155mm shell had risen from 2,000 euros ($2,171) at the start of Russia’s full-scale invasion to 8,000 euros ($8,489.60).
For comparison, the U.S. currently pays $3,000 for its most modern shells, according to an Army spokesperson. That price includes the charge, fuze, and shell body.
Unlike the U.S., European 155mm production is primarily in the hands of the commercial market. That means that European countries can incentivize production increases through purchases, but cannot order factories to invest in automation, double shifts, or build new plants, as the U.S. has.
“There really isn’t any government that can command industry to produce more, they have to place orders through contracts,” said CFR’s Loss.
European munitions firms, meanwhile, have few opportunities to raise money from private hands, thanks to regulations on banks and arms makers, Loss said. They therefore have trouble increasing production merely on the expectation of higher orders.
Some individual countries have ordered more munitions. Germany and the Netherlands budgeted billions more in military aid for Ukraine this week. Still, overall defense spending across Europe remains sluggish.
Nor are European countries likely willing to cede the control and band together to create one supranational organization for munitions production said Nick Witney, who served as the first chief executive of the EU’s European Defence Agency.
Countries will argue that “It’s an issue of democratic accountability over how national defense budgets are spent,” Witney said. “A lot of the time, it’s really an issue of protectionism, vested interest, and inertia.”
“We are pushing a lot” for European nations to increase their defense budgets, Pevkur said. “The biggest challenge and the biggest obstacle is very simple — you need new money.”
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