US & NATO Allies Are Considering Taking Over State-Owned Argentine Arms Manufacturer to Bolster Munitions for Ukraine

Desperate Times, Desperate Measures

By now NC readers are well versed on the largely self-inflicted problems the US and its NATO vassals are having keeping weapons and munitions flowing into Ukraine. Most NATO members have already stripped their cupboards bare of weapons stocks, including 155mm shells. In July, a special Reuters report admitted that “A decade of strategic, funding and production mistakes [had] played a far greater role in the shell shortage than did the recent US congressional delays of aid.”

There are many reasons for this chronic munitions shortage.  As Yves explained in her preamble to a recent cross-posted article, they include “a failure of the US and its NATO allies to invest in surge capacity”, “protracted and typically porky procurement processes” and “a general distaste for dirigisme”.

Stealth Privatisation

To bolster their dwindling stocks of munitions, the US and its NATO vassals are once again looking south, to Latin America. This time they are not asking governments in the region to donate or (in the words of the Commander of US Southern Command, General Laura Richardson) “switch out” Russian military equipment to Ukraine, which has so far yielded nada de nada, but are rather seeking to buy out a state-owned arms manufacturer in Argentina, with the goal of enlisting it in Ukraine’s war effort.

The firm in question is Fabricaciones Militares, which besides manufacturing small arms, machine guns, artillery, munitions, TNT, DNT and nitorglycerin, also produces rolling stock for the state-owned rail operator Ferrocarriles Argentinos. Until recently, Fabricaciones Militares was also producing explosives for a Peruvian mining company, but in May Argentina’s Javier Milei government severed the contract. According to the Argentine news broadcaster Canal 26, a U.S. military delegation has visited the company to gauge its logistical capabilities.

The Milei government has apparently already given the go-ahead for a US or European firm to take over operations at the Argentine state-owned enterprise. Such a move would be, to put it mildly, controversial, as well as rather strange given Argentina’s chronic manufacturing problems.

As Canal 26 notes, Fabricaciones Militares is not on the government’s list of 35 state-owned companies (public ports, aeronautics, satellites, water, banking, telecommunications, energy, railway, oil, coal and education companies) earmarked for privatisation in its Law of Bases. Instead, it was included in a list of state-owned companies to be transformed into publicly listed companies. That list was featured in the government’s Decree of Necessity and Urgency (DNU), announced in December.

Once Fabricaciones Militares is listed on the stock exchange, which could apparently happen as soon as September, a US or European company could take a controlling stake in the company. In other words, this is privatisation by stealth. There are apparently already a number of interested parties. According to Eduardo Bercovich, the secretary general of the ATE union in the city of Azul, where one of Fabricaciones Militares’ biggest plants is located, the Azul plant has already received visits from delegations of two companies, including the Czech CSG Group.

“Up for Auction”

Another installation in Río Tercero was visited in July by US government personnel, reports Tiempo de San Juan:

The visit in question, by US personnel in the company of representatives of the Ministry of Defence and the Directorate of Military Manufacturing, took place outside the “traditional” channels and was denounced by the unions operating at the plant. The complaint resulted in a call for answers by representatives of Juntos por el Cambio and the Justicialist Party in the Chamber of Deputies. Although the government has not yet commented on the matter, versions are growing regarding the US taking control of military facilities that would be used to manufacture equipment for NATO troops in Ukraine.

“We understand that at Fabricaciones Militares there is a sign up saying: ‘up for auction,’ Bercovich told Canal Abierta. “For the government, the only option being considered is to turn FM into a publicly limited company and have another country manage our defence industry.” This, he said, is “extremely concerning, especially since the Milei government wants the country to join NATO as well as produce arms for Ukraine, which could get us embroiled in the war in a big way.”

As we reported in June, Milei appears to be determined to turn Argentina into the first Latin American country to send weapons to Ukraine:

“Milei is determined to take sides in international conflicts, believing that this positions him as an international leader,” says geopolitical analyst Gonzalo Fiore Viani. “Everything he does is to reinforce that image and not to advance Argentina’s national interests.”

Milei seems determined to involve Argentina not only in the escalating tensions in the Middle East, but also in the meat grinder that is Ukraine. Yesterday, U.S. Secretary of Defense Lloyd J. Austin III welcomed Argentina as a new member of the Ukraine Defense Contact Group (aka Ramstein Group) during his opening address at the group’s 23rd meeting. The Ramstein Group is an alliance of (mainly NATO) countries that meets monthly at the Ramstein air base in Germany to coordinate the ongoing donation of military aid to the Zelensky government…

Argentina is the first Latin American country to join the group. In an interview with CNN Español’s Andrés Oppenheimer in April, Milei even entertained the possibility of sending military personnel into the meat grinder, a proposal that enjoys the support of just 21% of the population, according to a survey by the consultant Gustavo Córdoba. Any decision to send troops would have to go through Congress first, an unnamed diplomatic source told La Politica Online.

The same is not true of sending arms. A new article by Infobae suggests that Milei wants to gift Ukraine’s (now wholly unelected) President Volodymyr Zelensky five French-made fighter jets.

As we noted at the time, the biggest flaw in the plan was that the planes in question couldn’t actually fly — in fact, hadn’t flown for years. Days later, reports began emerging of plans to send Argentine tanks to Ukraine via Germany.

“A Hostile Act”

Russia was quick to respond, which it did by describing Argentina’s offer to send the planes and/or tanks to Ukraine as a “hostile act.” Through his ambassador to Argentina, Dmitry Feoktistov, Vladimir Putin urged Milei’s administration to refrain from interfering in Russia’s conflict with Ukraine, suggesting that Argentina would be far better served maintaining its neutral stance, and that way “preserving the friendly nature of Russian-Argentine relations, which have historically been immune to political trends.”

Feoktistov said:

“The reports about the possible shipment of Argentine tanks through Germany, similar to the agreement of the planes with France, are also worrying. We have clearly and firmly communicated to Argentina that such actions will be considered hostile actions against Russia.”

Feoktistov also criticised the participation of Argentine Defence Minister Luis Petri in the Ramstein Group.

“As for the participation of the Argentine Minister of Defense, Luis Petri, in the Brussels meeting, within the framework of the Ramstein coalition, there are still no official comments from the Argentine side. The… rapprochement between Buenos Aires and Ukraine’s military patrons causes us deep disappointment.”

He also said Russia’s government had responded to Argentina’s application to become a NATO global partner with bafflement. “Frankly, we do not understand how granting this status can improve Argentina’s security.”

It is a point we’ve been making since April when the application for membership was first announced. In fact, a question one could ask about pretty much every aspect of Milei’s foreign policy and geopolitical alignment is: how does the country of Argentina benefit? (Of course, it doesn’t). How does it benefit from its government’s enthusiastic support of Israel as Israel commits war crime after war crime in Gaza –including the worst crime of all, genocide. By doing this, Milei has essentially placed a giant target on Argentina’s back — in return for what?

How does Argentina benefit from its government’s decision to permit the installation of US military personnel along the Paraná-Paraguay Waterway, Argentina’s longest river system, upon which roughly 80% of all its exports travel? Or from the establishment of a joint US-Argentine naval base in Ushuaia, on the southern tip of Tierra de Fuego, granting US Southern Command significant influence over this key entry point to Antarctica? Or from distancing itself from its two closest trade partners, Brazil and China? Or from sending an ever larger chunk of its gold reserves to London, where it can be seized by any one of the country’s myriad unpaid creditors?

Or proposing to splash $100 million on Argentina’s Secretariat of State Intelligence at a time when it is slashing spending for public education, health care, pensions, public works, social spending and just about everything else? Said proposal was unanimously rejected by Argentina’s Congress, with even former President Mauricio Macri’s PRO party blasting the idea of spending $100 million on state intelligence and security at a time when “there is no money,” especially given the lack of transparency regarding how the money would be spent.

But I digress. Back to the main event.

As happened months earlier with Ecuador, another country whose US-aligned government offered to send weapons to Ukraine under the seeming impression that Russia would not retaliate, it didn’t take long for the Milei government to rectify its position. Just two days after Putin’s warning, Argentine presidential spokesman Manuel Adorni explicitly ruled out the possibility of “providing any kind of military support” to Ukraine, in response to a question raised about Russia’s warnings:

“We are not going to provide any type of military support. Yes, of course, we are going to offer humanitarian support, logistical support in terms of humanitarian issues and what is called the demining of the territory. But we are not going to interfere in any way in the war.”

Now, rather than handing Ukraine weapons, the Milei government is looking to give up Argentina’s arms manufacturers for the cause. And apparently Putin won’t notice or care.

But how much use will they be if the Milei government is already stripping Fabricaciones Militares of some of its key workers? Communiques offering early and voluntary retirements have already begun arriving in the staff’s inboxes. Many of the workers laid off will have skills and knowledge that will be difficult to replicate. Bercovich, the union man at Fabricaciones Miilitares, gives the example of one worker who has received more than 1,000 hours of training on how to make explosives.

“That [sort of knowledge] takes years to instil… but all the government wants to do is get rid of state workers.”

Which brings us neatly all the way back to Yves’ point about Western governments’ general distrust of dirigisme (state control of economic and social matters) making it so much harder for them to keep up with Russia’s munitions production. In the case of the Milei government, it is not so much general distrust that it feels toward dirigisme; it is unmitigated hostility.