Germany’s rearmament drive is reshaping its industrial landscape, as factories once dedicated to civil manufacturing pivot towards defence production to meet rising demand.
In Görlitz, a town historically tied to train manufacturing, a 176-year-old railcar plant will soon produce components for Leopard II tanks and Puma infantry vehicles.
Defence contractor KNDS stepped in last year after Alstom, citing cost pressures, decided to shut down the plant. While around half of the workforce will be retained, the move symbolises a broader shift gripping Germany’s economy.
Sad but necessary
“What’s very sad for me personally is that we still need arms production,” said Carsten Liebig, a retired train maker whose family has worked at the site for generations.
Across Germany, manufacturers in sectors such as automotive and engineering have been battered by high energy prices and shifting global demand. Output in energy-intensive industries has plummeted 20 per cent since 2021. For towns in the former East Germany, it marks a second painful wave of deindustrialisation following reunification.
€90bn defence budget
Yet Germany’s record €90bn defence budget is offering new hope. Rheinmetall, Thyssenkrupp Marine Systems, and other major contractors have expanded workforces by over 40 per cent in three years, and plan further hiring.
The transition is not without controversy. In Görlitz, where the anti-immigrant Alternative for Germany (AfD) party has seen rising support, some residents are wary of fuelling conflict through arms production. Sebastian Wippel, an AfD politician, warned against becoming a “means of gearing up for war.”
Nevertheless, local leaders have welcomed the economic boost. “The technologies manufactured here will protect Europe,” said Saxony’s Prime Minister Michael Kretschmer, hailing new “secure jobs” for the region.
Defence firms are increasingly targeting workers laid off from the struggling automotive sector. Rheinmetall and radar specialist Hensoldt have pledged to absorb workers from suppliers such as Continental and Bosch, although progress has been slow.
Good for jobs
KNDS has not commented publicly on its long-term plans for Görlitz, but unions have raised concerns about the sustainability of the boom, questioning how long growth in arms production can last without ongoing conflict.
For now, many in Görlitz are clinging to cautious optimism. “The world moves on,” said Liebig. “All we can do is hope that as many jobs as possible will stay on.”
