Latvia's Defense Minister Calls for Ukraine-Style Dispersed Arms Production
Latvia's defense minister Raivis Melnis is urging NATO militaries to learn how to break up weapons production before a conflict begins, warning that Western industry is organized for peacetime and could become its own single point of failure under attack. Speaking to Business Insider, Melnis said Ukrainian arms makers have learned to split manufacturing across multiple sites, operate underground, and relocate when necessary so that one successful Russian strike does not cripple their output.
That approach contrasts sharply with Europe, where many companies run programs from large centralized factories. Melnis described NATO industry as a 'peacetime establishment' built under conditions where there is no direct threat, and questioned whether Western firms are ready to produce systems in different, dispersed locations. He is encouraging partnerships between Latvian and Ukrainian defense companies so Latvian firms can learn how Ukrainian systems are 'built for war purposes.'
Ukrainian officials and executives have made the same argument. Davyd Aloian, deputy secretary of Ukraine's National Security and Defense Council, said the Russian threat to Europe is substantial enough that NATO companies should 'definitely' start breaking up production more. Frontline Robotics says it is designed to move as easily as possible; TechEx rotates production locations every couple of months for staff security; and Ark Robotics makes different components at different sites to avoid creating too big a target. Latvia is already applying these lessons to a new automated anti-drone wall, Ukraine-tested equipment, and a series of joint defense industry deals.
Why NATO's Concentrated Factories Look Like Wartime Single Points of Failure
The Latvian–Ukrainian partnership is about importing survival knowledge, not just hardware
Melnis wants Latvian engineers to combine their peacetime scientific base with Ukraine's combat-tested practices. That is a deliberate attempt to close a specific gap: Ukrainian companies work far more closely with front-line units than Western firms do, according to the minister. The reporting shows the partnership is not simply about buying equipment, but about transferring an operational doctrine that NATO currently lacks.
Concentrated factories embed a hidden wartime cost
Estonian drone maker Krattworks says a single large facility would be 'more economical, cheaper, and better' for Ukrainian companies, but they cannot do that because of Russian strikes. The same executive warns that European producers do operate that way, and that 'when the war strikes, I think we're going to be punished.' Croatia's ORQA CEO makes the tradeoff explicit: distributed systems are more resilient to disruption than centralized systems, even though there are economic downsides. What is treated today as efficient peacetime design may be reclassified as unacceptable vulnerability once production continuity becomes a national security requirement.
'No single point of failure' is becoming an operational principle, not yet a formal NATO standard
Ukraine's Frontline Robotics has adapted to endure the loss of any site; TechEx changes locations regularly; Ark Robotics deliberately avoids making its operations a large enough target to attract attention. These are practical adaptations, not products of a formal alliance rule. One executive said distributed manufacturing should be the default for defense-based manufacturing going forward, but that ambition still has to be translated into procurement requirements, investment decisions, and security protocols in Western Europe.
What This Means for NATO Defense Firms and Procurement Chiefs
For NATO defense contractors, suppliers, and procurement officials, the story points to a specific question: what happens to output if one key production site is struck? These steps follow directly from the practices described by Ukrainian and European firms in the reporting.
- Defense manufacturers: Map final assembly and critical component production against Melnis's warning. If a single plant is a bottleneck, use Frontline Robotics' move-ready design or Ark Robotics' multi-site component model as reference points for splitting operations before a crisis.
- Latvian and Baltic firms: Prioritize joint development with the named Ukrainian partners — Frontline Robotics, TechEx and Ark Robotics — to transfer combat-tested production methods alongside equipment, as Melnis is already steering Latvian firms to do.
- Procurement agencies: Insert wartime continuity requirements into tenders. Ask bidders how they would maintain output if one site were destroyed and what mobile or dispersed backup they can demonstrate, rather than rewarding only the lowest-cost concentrated option.
- Smaller European drone makers such as Krattworks and ORQA: Treat the extra cost of distribution as a resilience premium. ORQA's 'distribution is more resilient' principle should be built in now, because retrofitting multi-site production after a first strike is too late.
Risk & Opportunity Assessment
| Commercial Risk | Medium | Dispersing production raises unit costs and reduces economies of scale. Krattworks' Karmo Saar said a single large facility would be cheaper, and ORQA's CEO acknowledged economic downsides to distributed systems. |
| Competitive Risk | Medium | Firms that remain concentrated risk losing relevance with security-minded NATO buyers, while Ukrainian companies with proven dispersed models are being courted for partnerships — especially by Latvia. |
| Regulatory Risk | Low | No specific NATO or national procurement rule is identified in the reporting, but wartime continuity requirements could follow if procurement agencies adopt these lessons. |
| Reputation Risk | Medium | Melnis's description of industry as a 'peacetime establishment' could harden into a criticism if an attack exposes a single-point failure, leaving companies and governments to explain why production was not dispersed earlier. |
| Technology Disruption | Medium | The reported shift is mainly organizational — mobile and multi-site production plus closer battlefield feedback — but it changes how defense equipment is engineered, tested, and sustained. |
| Commercial Opportunity | High | Ukrainian companies and Baltic/European firms are already forming industrial partnerships, Latvia is announcing defense industry deals, and companies like ORQA are entering Ukraine, creating a direct market for dispersed manufacturing expertise and combat-tested systems. |
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