The company Industrias Metalúrgicas Pescarmona (IMPSA) is on track to become one of the first privatizations undertaken by Javier Milei’s government in its first year in office, with the American company ARC Energy emerging as the main interested party following the signing of a letter of intent; its nationalization had occurred in 2021. Amid a request from this company for an extension to present its capitalization offer, doubts arise in the defense sector regarding the continuation of the modernization program for the TAM 2C-A2 tanks of the Argentine Army, considering that to date the political authorities have not clarified whether the privatization proposal will include a plan to continue this program.
It is worth noting that the state-owned company, with a 63.7% stake from the national government and a 21.2% stake from the Mendoza provincial government, is currently carrying out a significant portion of the metallurgical work necessary to meet the new TAM 2C-A2 standard; five units of which were recently presented at the 602nd Arsenal Battalion of the Argentine Army. Examples of IMPSA’s relevance in this extensive program include the signing of an agreement in November 2023 for the manufacture of the tank’s side skirts, as well as for performing welding work, engineer training, and provisioning of consumables for 71 tanks.
Furthermore, IMPSA is also heavily involved in modifying the TAM turret structure since the agreement signed in 2022 and funded by the FONDEF program launched by the previous administration. Responsible for machining the turret, the work done at the Mendoza company allows for the installation of new systems that contribute to the A2 version of the tank.
In detail, some of these modifications include replacing the turret’s hydraulic control system with an electric one, changing the old analog stabilization system to a system consisting of microcontrollers and solid-state gyroscopes, and installing a new Atmospheric Unit that allows the gunner to account for variables such as wind and temperature when firing. All of these modifications are carried out at the aforementioned 602nd Arsenal Battalion, which is part of the Argentine Army’s Arsenal Directorate.
As can be seen, IMPSA’s work is a key part of the production process for the continuity of the TAM 2C-A2 modernization program. The lack of clarity regarding the offer to be presented by the potential American buyer, as well as the political authorities’ silence on the matter, makes it a priority to obtain definitions looking towards the near future.
In other words, given the history of privatizations of strategic companies for national defense, if the authorities do not push for plans to sustain such programs, it is reasonable to fear that they could be discontinued due to lack of profitability. This would not necessarily result in the cancellation of the program, but it could lead to significant delays while searching for a company with the capability and interest to see it through.
The situation is further complicated by the fact that only one company, ARC Energy, is interested in proceeding with the proposed privatization by the current government, while inquiries from Spain and Chile did not materialize formally. During the ongoing negotiations, no clauses have been included to ensure that the transfer of the company to private hands would mandate the continuation of current projects, such as the mechanization of the TAM 2C-A2 turrets for their subsequent modernization at the 602nd Arsenal Battalion. In this regard, it is worth noting that IMPSA’s finances show liabilities amounting to nearly US$ 500 million, which will need to be negotiated with the potential buyer.
For now, the Argentine Army will be pushed to make a significant effort to advance the modernization of one of its crucial assets for national defense once again. This has been the case in the recent past, as in the latter half of last year, the force worked hard to secure the supply of spare parts and sensors from the Israeli company Elbit Systems amid the ongoing conflict in the Gaza Strip.
The memorable photo of President Javier Milei and his Vice President, Victoria Villaroel, on a TAM 2C-A2 during the recent parades in Buenos Aires is a product of the effort made by the Argentine Army. It is time for this effort to be reciprocated by the government with clarity and long-term responsibility regarding the modernization and re-equipment of the Military Instrument, to match the rhetoric with tangible actions.
*Photographs used for illustration purposes.
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