Against the backdrop of a deep crisis in the automotive industry, Germany is making an unprecedented economic maneuver: the famous factories of Mercedes and Volkswagen are now being retooled for the production of weapons and ammunition. Learn how the country is changing its manufacturing landscape.
Amid a deep crisis engulfing the automotive industry, Germany is decisively launching a large-scale transformation of its economy. The former factories of giants like Mercedes and Volkswagen are now rapidly being retooled for the production of weapons and ammunition. According to The Wall Street Journal, citing the German government, Berlin is effectively changing its economic model, betting on defense production instead of civilian manufacturing.
Economic Turn: From Cars to Cannons
Every month, Germany's manufacturing sector is losing about fifteen thousand jobs, with this blow predominantly hitting the once-thriving automotive industry. By the end of 2025, Mercedes-Benz's profits plummeted by 49%, while Volkswagen faced a decline of 44%. The world's second-largest automaker has already announced plans to cut about fifty thousand employees by 2030.
New Life for Personnel and Factories
However, the laid-off highly skilled workers and idle production lines are not left without work. Recent changes in legislation in Germany and the European Union have opened up unprecedented access to large-scale financing for defense companies. Now, throughout the country's industrial zone, factories are actively being re-equipped for military production.
Berlin's Strategy: Replacement, Not Rescue
Berlin's approach, as noted by WSJ, is not to attempt to save an outdated economic model but to radically replace it. Volkswagen is already actively negotiating with Israeli partners to establish the production of components for the famous Iron Dome missile defense system by 2027. Several enterprises have already introduced a third shift to ensure the production of much-needed shells for Ukraine.
In the near future, the production of Patriot missile defense systems, which was previously carried out exclusively in the USA, will be established in Germany. These steps underscore the country's ambitions to become a key player in the European defense industry.
Investment Boom in Defense
The German government reports that nearly 90% of all European venture capital invested in defense technologies is going to German companies. This indicates the growing trust and strategic importance placed on the defense sector in modern Germany.
