Baden-Württemberg experiences surge in arms sales and manufactured weapons production growth

Boom in Baden-Württemberg's Defense Sector

The defense industry in the southwest German state of Baden-Württemberg is experiencing a significant surge, with key players setting records and expanding their operations.

Rolls-Royce Power Systems, operating under the MTU brand, achieved a milestone in 2024 by breaking the 5 billion euro turnover mark, a first in Friedrichshafen. The company's success is attributed to the high demand for tank engines, such as those used for the Puma and other models.

Thales, another major player, manufactures portable radar technology and Wanderfeldrohrenverstaerker at its German subsidiaries in Ditzingen and Ulm. With 800 employees in Ditzingen and 520 in Ulm, the company generated 500 million euros in turnover last year, the largest part coming from the defense sector.

Heckler & Koch, based in Oberndorf am Neckar, is another company experiencing a resurgence. After increasing its employee count by about one-fifth to around 1300 since early 2022, the weapons manufacturer is breaking records in sales and equipping neighboring countries of Russia with new weapons.

Heckler & Koch is not just a weapons manufacturer anymore. It now offers accessories from suppliers, such as silencers, together with its weapons as a system. The company is also venturing into new areas, such as grenade launcher drone defense, by collaborating with an AI company and a vehicle turret manufacturer. Heckler & Koch plans to invest 150 million euros over the next five years for technological expansion, strengthening industrial capacities, and positioning itself as a systems provider in the defense sector.

Diehl Defence, a major player on Lake Constance, is also expanding its site to increase production of Iris-T air defense systems. Last year, the defense division of Diehl Defence recorded a 60% increase in sales, reaching around 1.8 billion euros, and expects further increases this year.

The defense and armaments industry in Baden-Württemberg is growing due to Russia's attack on Ukraine. The state, particularly the Lake Constance region, is among the key regions in the defense industry, along with Bavaria, NRW, and shipyards on the North and Baltic Seas.

Despite this growth, the defense industry remains a smaller employer compared to the automotive industry, which currently employs 230,019 people. Nevertheless, the industry holds great potential, as noted by Nicole Hoffmeister-Kraut, the Economic Minister of Baden-Württemberg.

Daimler Truck is also pushing its military business, which currently makes up less than 1 percent of the group's turnover. The military business is part of the Mercedes-Benz Special Trucks (MBS) division, which currently employs 1100 people.

However, the search results do not provide information about the main companies in the defense sector in the southwest of Baden-Württemberg or their planned expansions of production facilities. This could indicate a growing but less transparent sector within the region.

Baden-Württemberg experiences surge in arms sales and manufactured weapons production growth