Summary
In response to Russia’s invasion of Ukraine, Deutz, a historic German engine manufacturer, pivoted to defense, anticipating that 2% of its projected €2bn annual revenue will now come from military contracts. This shift reflects a broader trend among Germany’s Mittelstand companies, as they embrace rising defense spending amid economic challenges, with firms like Alzchem reorienting from agricultural supplies to ammunition production. The move marks a significant cultural shift in Germany, where arms manufacturing has long been taboo due to historical associations with the Nazi regime.
