Analysis-Tanks not cars: how a pivot to defence could help Germany's economy


FILE PHOTO: A view of a production line as German Chancellor Olaf Scholz and Defence Minister Boris Pistorius visit the future site of an arms factory where weapons maker Rheinmetall plans to produce artilleries from 2025, in Unterluess, Germany February 12, 2024. REUTERS/Fabian Bimmer/Pool/File Photo

FRANKFURT (Reuters) - German defence companies seeking more capacity as Europe prepares to raise military spending are eyeing the ailing car industry, the first sign of a shift that could help revive the continent's biggest economy after two years of contraction.

Manufacturers of tanks, radar and weapons are aiming to ramp up production as Europe responds to U.S. pressure to take care of its own defences. Carmakers, for decades Germany's economic powerhouse, are meanwhile cutting jobs and shutting plants amid slowing demand and a creaking electric vehicle transition.

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