the Wall Street Journal <\/a>writes.<\/p>\nThe scale of the downturn is evident across key indicators. Roughly 15,000 manufacturing jobs are being lost each month, including in the once-dominant automotive industry. Major carmakers have reported sharp declines: Mercedes-Benz saw profits fall 49% in 2025, while Volkswagen posted a 44% drop and announced plans to cut 50,000 jobs in Germany by 2030. Porsche has also been hit hard, with operating profit plunging 98% compared with 2024.<\/p>\n
While services now account for around 70% of Germany\u2019s economic output, manufacturing remains a critical pillar at about 20%, with extensive links to industrial supply chains.<\/p>\n
Against this backdrop, Berlin is increasingly positioning the country as the backbone of Europe\u2019s defense industry, amid growing concerns over regional security and uncertainty surrounding long-term U.S. security guarantees.<\/p>\n
\u201cThe car industry is going through a crunch because of the global downturn, geopolitical risks and rising competition from China,\u201d said Klaus Rosenfeld, chief executive of Schaeffler.<\/p>\n
\u201cA great trend in the German economy is that people are asking much more than before \u2018how can we contribute to what has not been done over the last many years\u2014to regain the ability to defend ourselves\u2019\u2014and this is what we are doing,\u201d he added.<\/p>\n
Rosenfeld\u2019s company has begun producing engines for drones, onboard systems for armored vehicles, and components for military aviation, aiming to generate 10% of its \u20ac24 billion turnover from defense.<\/p>\n
\u201cIn Germany there is a lot of whining\u2014if everyone just complains all the time that things are horrible then nothing will work. We must roll up our sleeves,\u201d he said.<\/p>\n
Government policy is reinforcing this shift. Berlin is not attempting to revive its old industrial model but to replace it, redirecting idle factories and laid-off skilled workers toward defense production. The push is supported by regulatory changes in Germany and the European Union that have improved access to capital for defense firms, alongside nearly \u20ac1 trillion in public funding driven by security concerns.<\/p>\n
\u201cEurope must be able to defend itself [and] that also means building a strong security and defense industry we can depend on,\u201d said Economy Minister Katherina Reiche.<\/p>\n
\u201cRepurposing existing production sites from other industries can reduce the hurdles to scaling up domestic capacity,\u201d she added.<\/p>\n
Industrial firms are already adapting. Volkswagen is reportedly in talks to produce components for Israel\u2019s Iron Dome system by 2027, while other manufacturers have expanded shifts to meet demand for ammunition and weapons, including supplies for Ukraine.<\/p>\n
Sebastian C. Schulte, chief executive of engine manufacturer Deutz, described how the company pivoted rapidly following Russia\u2019s full-scale invasion of Ukraine.<\/p>\n
\u201cTransforming the company became my job,\u201d he said.\u00a0\u201cOur USP is stable supply chains: What works for engines and mining equipment will work for the defense industry.\u201d<\/p>\n
The strategy has delivered results. Deutz has expanded into supplying engines for Patriot air-defense systems and unmanned vehicles, while avoiding mass layoffs and achieving 15% revenue growth last year.<\/p>\n
\u201cWe decided to put our money where our mouth is,\u201d Schulte said.<\/p>\n
As Europe races to rearm, Germany\u2019s industrial reinvention is gathering pace\u2014turning economic adversity into a strategic realignment with far-reaching implications.<\/p>\n
By Sabina Mammadli<\/p>\n","protected":false},"excerpt":{"rendered":"Germany is accelerating a dramatic transformation of its industrial base, pivoting from a struggling export-driven model centered on…\n","protected":false},"author":2,"featured_media":6414,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[8,14,13,5,9,12,7,11,10,6],"class_list":{"0":"post-6413","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-germany","8":"tag-analysis-of-azerbaijan","9":"tag-azerbaijan","10":"tag-baku","11":"tag-germany","12":"tag-important-news-of-azerbaijan","13":"tag-international-experts","14":"tag-interviews","15":"tag-interviews-with-azerbaijani-analysts","16":"tag-news-from-baku","17":"tag-news-of-azerbaijan"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/6413","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/comments?post=6413"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/6413\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media\/6414"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media?parent=6413"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/categories?post=6413"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/tags?post=6413"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}