As Germany ramps up defense spending, the country’s automotive sector is being courted for skilled workers. With a massive €72 billion investment in bolstering military defenses across Europe, job opportunities are emerging that could transform the lives of redundant auto workers.
The German parliament’s decision to massively increase defense spending over the coming years could thoroughly reshuffle Germany’s industrial landscape. While struggling auto manufacturers like Volkswagen are shedding jobs, German manufacturers of tanks and cruise missiles, such as Rheinmetall and Diehl, are desperately seeking workers.
The German defense industry is a significant contributor to the country's economy, with a turnover of over €40 billion in 2020.
The sector employs around 70,000 people and accounts for about 10% of Germany's total exports.
Major players include Airbus, Diehl, Hensoldt, and Rheinmetall.
The industry is driven by domestic demand, NATO commitments, and exports to countries like Saudi Arabia and the United Arab Emirates.
A study by consulting firm EY and German lender DekaBank found that Europe’s NATO members will invest an estimated €72 billion annually in bolstering their military defenses. This will create or secure 680,000 jobs in Europe, according to the study. A survey of top decision makers in Europe’s defense industry also concludes that jobs in the sector will boom across Europe.
However, the exact number of skilled workers needed depends on how much European NATO states really increase their defense spending. If they allocate 2% of their GDP to defense, about 160,000 skilled workers will be needed by 2030 in Europe. With a moderate increase (2.5% of GDP), around 460,000 positions could remain unfilled, and with a significant increase (3%), that number could reach up to 760,000.
According to the SIPRI, global military expenditure reached $1.98 trillion in 2020, a 3.5% increase from 2019.
The United States accounted for 38% of total spending, followed by China at 15%, and India at 4%.
Defense spending as a percentage of GDP varies significantly among countries, with the US allocating 3.7%, while Sweden allocates only 1.2%.
The global trend shows an increase in military expenditure over the past decade, driven by rising tensions and conflicts worldwide.
A skilled worker is an individual with specialized knowledge, training, and experience in a particular trade or occupation.
They possess advanced technical skills, often requiring formal education, apprenticeships, or extensive on-the-job training.
Skilled workers are typically characterized by their ability to perform complex tasks efficiently and effectively, contributing significantly to the productivity and competitiveness of their organizations.
Germany is expected to be one of the biggest beneficiaries of European rearmament, with its defense sector currently employing around 60,000 people. The country’s defense industry boom has sparked interest in recruiting workers from struggling German industries, such as the automotive sector. Companies like Hensoldt and KNDS are already exploring opportunities to hire redundant employees.
However, switching from a civilian to a defense job isn’t always easy. ‘A transition is only possible in certain positions and specialized roles,’ notes Eva Brückner, Managing Director of the German recruitment consultant Heinrich & Coll. While qualified assembly line workers or development engineers can make the transition, others may face challenges, especially in sales or procurement.
Security clearances are also a major challenge facing defense companies when hiring fresh personnel. The current processing times for these approvals are far too long to enable a rapid transition of personnel. Additionally, Germany’s Security Clearance Check Act refers to a list of countries deemed a significant risk to national security, which can limit the pool of potential employees.
Despite these challenges, experts believe that Europe’s rearmament drive could be slowed down by the current lack of skilled employees on the continent. However, with the right policies and incentives, such as reduced funding for research institutes and universities in the US, Europe could attract some of the brightest minds.
The defense sector needs to rethink its recruitment strategy quickly and bring in more women in leadership roles. ‘IT specialists and artificial intelligence experts are in high demand, but in short supply,’ IT specialists and artificial intelligence experts are in high demand, but in short supply. Firms will have to raise their pay scales even further to attract these urgently needed specialists.
Key Considerations for Auto Workers
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The German defense industry is expected to boom, creating new job opportunities for auto workers.
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Companies like Hensoldt and KNDS are already exploring opportunities to hire redundant employees from the automotive sector.
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However, switching from a civilian to a defense job isn’t always easy, especially in sales or procurement roles.
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Security clearances can be a major challenge facing defense companies when hiring fresh personnel.
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Firms will have to raise their pay scales even further to attract IT specialists and artificial intelligence experts.
