If you’ve been following the European auto scene lately, you probably know it’s been a bumpy ride. Between falling sales, a slow-moving energy transition, and political headwinds, things have been anything but smooth for the car makers.
But here’s a twist you might not see coming: while automakers are struggling, their suppliers—called manufacturers—are getting hit the hardest. Layoffs at these parts producers have been piling up for months, if not years, signaling deeper issues in the supply chain.
Shifting Gears to Meet Demand
A manufacturer isn’t just some faceless factory. It’s a full-blown industrial operation with its own lines, machinery, and R&D teams. Take Bosch for example: you know them for ADAS, brakes, and electronics in cars, but they also make HVAC systems, renewable energy gear, and even home appliances. Diversification is their secret sauce.
Yet when the auto market hit a slump, even giants like Bosch felt the sting. Smaller players, though, had to pivot or perish. Enter Hirsch Engineering, a German SME founded in 2016 that, in a matter of years, went from crafting engine components for Audi to building defense systems.
Founder Thomas Hirsch tells it straight: when car sales started sliding, and electric deadlines loomed, the company’s core business crumbled. With Chinese competitors in full sprint, staying in the auto lane felt like a dead end. So Hirsch did what any savvy business leader would—he followed the money and chased demand.
Steering into Defense: A Case Study
It wasn’t an overnight decision. Hirsch Engineering spent months exploring options, scouring markets, and retooling plants. Soon, their production lines—once churning out transmissions and sensors—were reconfigured for defense contracts, security panels, and even aerospace components.
Fast-forward five years, and a whopping 95% of Hirsch’s revenue comes from non-automotive sectors. The gamble paid off, transforming a shaky parts shop into a stable defense supplier.
Navigating the Moral Highway
But this pivot wasn’t all high-fives and champagne. In Germany, where pacifism has deep roots since World War II, making weapons sparks debate. Internally, the Hirsch team wrestled with whether they wanted to build machines designed to harm.
Then geopolitics kicked in. With tensions rising in Eastern Europe and governments boosting defense budgets, perceptions shifted. Work that once felt questionable started to look like a patriotic duty, especially as the state poured cash into national security.
Still, ethics are never black and white. Hiroshi Engineering hosted town halls, ethical committees, and late-night brainstorming sessions, all to ensure every employee felt comfortable with the new mission. It wasn’t just about profits—it was about building something they could stand behind.
Impact on Workforce and Industry
The transformation at Hirsch is just one piece of the puzzle. Major players like Continental have inked deals with Rheinmetall, moving hundreds of auto workers into armament plants. When Continental announced 7,000+ layoffs globally, this partnership gave some folks a lifeline.
Workers from a closing plant in Gifhorn were offered seats at Rheinmetall’s Unterlüss site. It’s a 30-minute commute, but for many, it’s a chance to swap engine parts for shell casings. Some welcomed the shift, eager for job security. Others wrestled with the idea of building weapons rather than wheels.
When Transitions Hit Roadblocks
Not every pivot is seamless. In Baden-Württemberg, engine specialist Mahle put all its chips on electric drivetrains, leaving little room for defense projects. Ethical qualms also slowed talks with military clients—after all, some engineers just don’t want to build rifles, no matter the paycheck.
Unions, particularly IG Metall in Germany, remain skeptical that defense can fully compensate for auto industry losses. While they acknowledge that arms contracts can save thousands of jobs, they worry about long-term stability and the moral implications of a defense-heavy economy.
Gearing Up for the Future
Back in France, a former Renault car plant now cranks out artillery shells. Across Europe, the lines between civilian and defense manufacturing are blurring. Governments are pouring billions into security, and manufacturers are retooling at breakneck speed.
For suppliers, the message is clear: if the auto world stalls, you’d better find another highway. Whether that’s defense, aerospace, or renewable energy, diversification is no longer optional—it’s survival.
Wrapping Up
The auto industry’s downturn has unintentionally fueled a defense boom. Companies like Hirsch Engineering show that with the right strategy, even a struggling supplier can reinvent itself. But as factories swap engines for explosives, the debate over ethics and economics is only getting started.
So next time you hear, “A tank can’t replace a Porsche,” remember: for some factories, that’s exactly what’s happening under the hood.
