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As Germany Rearms, Carmakers Turn to Defense Contracts

From Volkswagen to Mercedes, the country's struggling auto industry is embracing defense production—even as workers question what they're being asked to build.

Words: Mathew Schumer
Pictures: Maksym Kaharlytskyi
Date:

Facing an unprecedented decline in revenue and confidence, Germany’s flailing automotive industry is betting on weapons manufacturing to help recoup its losses. While members of auto works councils and unions debate the practicality of pivoting toward arms production, workers are left to wrestle with the moral implications of creating instruments of war, mirroring an internal struggle shared by many across the nation and around the world.

“[We] repeatedly demand that the company bring work to the factories,” said Lars Hirsekorn, who has worked for Volkswagen since 1994 and served as a full-time member of its works council from 2022 to 2026. “Management essentially says: ‘We can do that. We can build armaments, but if you don’t want that, we’ll have to close factories.’ That’s blackmail.”

Like many workers in the German auto industry, Hirsekorn has watched the sector’s steady decline in recent years, mirroring a deterioration of the German public’s attitudes toward the industry. He told Inkstick that conditions for auto workers have deteriorated so much in the last 15 years that people no longer aspire to join the industry. “Many older colleagues often say, ‘Thank God my children chose [to do] something else,’” added Hirsekorn.

A pivotal point came in March, when reports began to circulate about the company planning a collaboration with Rafael Advanced Systems, the Israeli firm known for being the primary manufacturer of the Iron Dome. This partnership was slated to take place at Volkswagen’s Osnabrück factory, which has been on the brink of closure for the past two years.

Over 2,000 people work at the plant in Osnabrück, dubbed “The City of Peace” for hosting a Renaissance-era peace congress credited by many as an inception point of international law.

Volkswagen CEO Oliver Blume said in April that the company “will not produce any weapons,” but is in “intensive discussions” with the defense industry about potential military applications for the plant, such as military transport.

Then in late April, Rafael Advanced Systems and Volkswagen reportedly signed an agreement to produce Iron Dome missile parts at the Osnabrück factory.

In early May, Hirsekorn and more than 20 workers and council members responded by signing a petition titled “No to the Shift to a War Economy.”

Volkswagen Council spokesperson Heiko Lossie downplayed the petition, calling the appeal a “completely marginal issue within the Volkswagen world,” adding that it “has no relevance whatsoever amongst the workforce in Osnabrück.”

Then in the first weeks of June, Volkswagen cut the working hours of its Osnabrück workers to four days a week.

“The wage sacrifice will soft boil my colleagues, so that they’ll cry for weapons contracts,” said Hirsekorn.

When asked about the works council’s stance on Volkswagen’s repositioning, Lossie pointed Inkstick to earlier comments made by its chair, Daniela Cavallo. “We are not considering new business opportunities in other industrial sectors as a way of replacing existing commitments [made by Volkswagen],” the statement indicated.

“At the most, these might involve additional new areas of business – serving as further pillars of support for our sites. Should such opportunities arise – whether within the Group or with external partners – the employee representatives will examine them with an open mind.”

Artur Siemens, a spokesperson for IG Metall, Germany’s primary metalworkers union, told Inkstick that the union views discussions about this shift with skepticism. He thinks transferring large swaths of workers to a new industrial sector is impractical.

“Unlike in the high-volume automotive industry, for example, the defense sector is dominated by small-batch production,” said Siemens. “Even if production volumes are ramped up here, manufacturing will not resemble that of the automotive industry.”

Siemens said that IG Metall has cautioned auto manufacturers against pinning their hopes on the defense industry, which he says will not be enough to offset their impending job losses.

Tristan Volpe, an associate professor at the Institute for Peace Research and Security Policy at the University of Hamburg, agreed, projecting that the transition will be costly and complicated. However, he said that the German federal government is likely motivated to stimulate the transition, given the mounting possibility of conflict toward the East. 

 “Germany and Europe didn’t really feel the need to arm at this level until at least 2014, and especially after 2022, against the threat from Russia,” said Volpe, referring to the start of Russia’s war on Ukraine. He pointed to other examples of mounting defense spending in Asia and the Middle East, but said that Europe is distinct because it is coming from “a baseline of relatively low spending.”

“German society as a whole is under threat,” the German Bundeswehr declared in its announcement of its new military strategy in April.

The country’s leadership has had an increasing focus on security for several years — beginning with the refugee crisis in 2015 and escalating with the advent of the war in Ukraine.

In April, a NATO resolution tied member states — including Germany — to committing 5% of their gross domestic product to core defense requirements by 2035. 

In May, the Trump administration announced it was pulling 5,000 US troops out of Germany. 

Of the nearly 80,000 active-duty US military personnel stationed in Europe, 38,000 are posted in Germany — more than are stationed in most US states.

The move follows a series of actions taken by the Trump administration to position the US away from NATO, which Trump called a “rip-off… where [other nations] pay virtually nothing, most of them. And we’re paying the majority of the costs.”

Volpe told Inkstick that with the coming changes in US foreign policy, European countries are beginning to take stock of their portfolio of defense capabilities — many of which are predominantly American-made.

“The world has become a more unpredictable place, and… it is absolutely clear that Europe needs to increase its defense profile,” Mercedes-Benz CEO Ola Källenius told The Wall Street Journal in May, revealing that the company was also eyeing a move into Germany’s defense apparatus.

Less than a month later, Mercedes announced a collaborative venture with Munich-based AI drone manufacturer TYTAN Technologies. The companies signed a memorandum of understanding, outlining the development of a “vehicle-based drone defense and deployment system based on the G-Class, as well as a mobile drone carrier based on the Sprinter.”

No matter which company they work for, Hirsekorn believes numerous workers across Germany’s auto industry are also concerned with their employers’ involvement in the war economy.

“Part of the workforce has long been demanding that their union take a clear stance against wars. Many have made this demand, particularly in light of the massacres in Palestine,” said Hirsekorn.

But as the auto giants move forward with their collaborations with defense contractors, the workers’ representatives do little to quell those pleas.

“Some will [resign],” Hirsekorn said of the coming changes, “but not many.”

Mathew Schumer

Mathew Schumer is a freelance reporter and photojournalist based in Germany. He covers German domestic issues and EU foreign policy. Before moving to Europe, he was a staff writer at The Baltimore Sun and reported on criminal justice in DC for the Washington City Paper.

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