Underground Innovation: NATO Drone Maker Adopts Ukraine’s Wartime Manufacturing Model

A New Strategy for Defense Resilience

The landscape of modern defense manufacturing is undergoing a significant transformation as Western firms begin to adopt the survival tactics forged in the crucible of the war in Ukraine. Croatian drone technology company ORQA has entered into a strategic partnership with the Ukrainian manufacturer General Cherry, a collaboration that includes the construction of an underground factory in Ukraine. This move is designed not only to boost production capacity but to serve as a blueprint for how NATO-aligned companies can maintain critical output while under the constant threat of attack.

The Shift Toward Decentralized Production

For decades, Western defense industries have favored centralized, highly efficient manufacturing hubs. However, industry leaders are increasingly viewing this model as a liability. ORQA CEO Srđan Kovačević argues that the “distributed nature” of Ukrainian industry—which frequently involves splitting production across multiple, often hidden or subterranean sites—offers a level of resilience that concentrated systems cannot match. By avoiding a “single point of failure,” Ukrainian firms have managed to keep production lines moving despite the persistent risk of Russian strikes.

This sentiment is shared by officials across the alliance. Raivis Melnis, Latvia’s defense minister, has highlighted the need for NATO companies to reconsider their reliance on centralized hubs. Similarly, experts within the sector, such as Krattworks sales head Karmo Saar, have warned that European companies risk being “punished” in a potential conflict if they fail to adopt more dispersed, resilient manufacturing practices.

Efficiency Through Proximity

While the primary driver for moving production underground is security, Kovačević notes that there are significant logistical advantages to manufacturing within Ukraine. Producing components locally is far more efficient than manufacturing them within NATO borders and attempting to ship them into a war zone. By localizing the supply chain, the partnership can facilitate a more rapid exchange of information regarding battlefield needs, allowing for faster iteration of technology.

The partnership aims to leverage the unique strengths of both nations. While the West possesses deep technological expertise, Kovačević emphasizes that Ukraine holds “immensely valuable lived experience” in applying that technology to the realities of 21st-century warfare. The joint venture will see the development of interceptor drones and counter-drone systems. Serial production for NATO markets will take place in Croatia, while the Ukrainian facility will focus on the production of essential components, such as electronics and communications systems, to support both local requirements and international partners.

Balancing Trade-offs

Despite the strategic benefits, industry leaders acknowledge that this shift is not without its drawbacks. Achi, CEO of the Ukrainian-Estonian firm Ark Robotics, describes these defensive measures as “necessary” but “not ideal.” The logistical complexity of managing dispersed, underground facilities is significantly higher than operating from a single, centralized location. Nevertheless, as the threat environment in Europe evolves, the consensus among these firms is that the economic downsides of decentralization are a price worth paying for increased operational survival.

Ultimately, the collaboration between ORQA and General Cherry represents a broader shift in Western strategic thinking. By integrating Ukraine’s battlefield-tested resilience with European manufacturing capacity, these companies hope to reduce reliance on external suppliers—such as those in China—and build a more robust, battle-ready defense industrial base capable of weathering the challenges of modern conflict.

Source: businessinsider.com