A growing number of German businesses are moving into military equipment and services as they break a widespread taboo to supply the arms industry in the wake of Russia’s invasion of Ukraine. Engine maker Deutz last week saw its shares jump more than 20 per cent after it said it was looking to build tank engines alongside its civilian operations. The engineering group is among those Mittelstand manufacturing and engineering companies reconsidering or ending their ban on defence contracts.
In sharp contrast to the booming defence sector, the country’s auto industry has had to announce swingeing job cuts amid a difficult transition to electric vehicles. Germany was facing the reverse situation of Europe immediately after the cold war, when companies faced the need to convert military production operations to civilian manufacturing, said Christian Mölling at the German Council of Foreign Relations.