The geopolitical shift in the landscape brought about by Donald Trump’s arrival in the White House has forced European countries to develop their own defence plans. And moves among European companies have not been long in falling into line. Europe’s largest arms manufacturer, the German company Rheinmetall, has announced that it will reorganise its facilities in Berlin and Neuss, which until now manufactured automobile parts, to produce ammunition and other defence products. According to the company’s plans, both factories would become part of Rheinmetall’s Arms and Ammunition division and serve as hybrid plants. This, they claim, allows for the manufacture of weapons while ensuring part of the existing automobile production. The company states that no final decisions have yet been made regarding the new factory structure. However, they they have said that the facilities will not process explosives, but will instead produce protective and mechanical components for military use. “Above all, the plants will benefit from the industrial strength of the Rheinmetall Group as a leading supplier of military equipment, as well as from high customer demand in Germany and around the world,” Rheinmetall sources told Reuters. “We are well prepared and have no reason to be timid: we must act now for security in Europe,” said Armin Papperger, the company’s CEO. Rheinmetall is not the only German company transforming its civilian facilities into military production plants. Earlier this month, KNDS Deutschland announced its intention to convert its railway carriage manufacturing plant in Goerlitz, in the east of the country, to produce armoured vehicles such as the LEOPARD 2 tank and the PUMA infantry fighting vehicle.

A bet on military spending

Trump’s pressure on Europe to increase its military spending and the recent security summit held in Munich following the US president’s sidelining the EU and Ukraine in peace talks with Russia have caused the shares of European arms manufacturers to soar. The STOXX Aerospace and Defence Index (.SXPARO) reached all-time highs last week. Investors are betting that European governments will ramp up spending on weapons and military equipment to alleviate their defence dependence on the US. “For me, it will be an absolute priority to strengthen Europe as soon as possible so that, step by step, we truly stop depending on the United States,” said Friedrich Merz, the likely new German chancellor, in a television talk show with the main candidates in the German general elections.

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From El Confidencial. Image: Andre Potzler CC BY 2.0