Germany becomes the world's largest producer of conventional ammunition as shell factories replace car plants

Rheinmetall CEO Armin Papperger announced that Germany has officially surpassed the United States in conventional ammunition production capacity, with annual artillery shell output surging from 70,000 to 1.1 million units. He also predicted that the defense industry will replace approximately one-third of the jobs lost in the German automotive sector. (Context: Morgan Stanley issued a pessimistic forecast: the Strait of Hormuz cannot be reopened this month, with Polymarket predicting only a 30% chance of reopening.) (Background: Barclays warned that history shows when the Fed Chair changes, the U.S. stock market faces an average 16% pullback.) Germany, once a global manufacturing powerhouse known for automobiles and precision machinery, is quietly installing a new production line—artillery shells. In an interview with Süddeutsche Zeitung, Rheinmetall CEO Armin Papperger stated directly: "Germany has now surpassed the United States in conventional ammunition production capacity." Behind this statement lies a set of staggering figures: annual production of military trucks has expanded from 600 to 4,500; medium-caliber ammunition has increased from 800,000 to 4 million rounds; and 155mm artillery shells have jumped from 70,000 to 1.1 million units. Rheinmetall currently employs 44,000 people and plans to expand to 70,000 by 2030. If the supply chain is included, the number of beneficiaries in the workforce could increase by another 210,000. Papperger emphasized that the company currently works with 11,500 German suppliers, 4,500 of which are also supply chain partners for automotive manufacturers. This means that the equipment, manpower, and technology of the automotive industry are being quietly absorbed by the defense industry. The German automotive industry has been mired in a structural crisis in recent years, with waves of layoffs continuing. Papperger predicts that arms production will fill one-third of the jobs lost in the automotive sector. This is not a metaphor, but a real industrial substitution: in 2025, Rheinmetall received 250,000 job applications in Germany alone, with total applications reaching 350,000, proving that the old impression of the defense industry being "unattractive" is now history. In August 2025, Europe's largest large-caliber artillery shell factory was officially opened in Unterlüß, Lower Saxony, marking the transition of Germany's rearmament from policy declaration to substantive mass production. The goal is to produce 1.5 million 155mm artillery shells annually by 2027, surpassing the 1.2 million annual production target set by the U.S. Department of Defense. Germany's defense industry leap is a microcosm of a larger wave of rearmament across Europe. In 2026, Germany's defense budget will reach 108.2 billion euros, a significant increase from 86 billion euros in 2025, with its share of GDP rising to 2.6%. There are also plans to borrow an additional 400 billion euros over the next five years for rearmament. In 2025, Germany's military spending increased by 24% year-on-year to 114 billion USD, the first time it has exceeded the 2% of GDP threshold since 1990. The EU's "Rebuild Europe" plan provides an 800 billion euro framework, including 650 billion in fiscal flexibility and 150 billion euros in joint borrowing (SAFE bonds). NATO also set a historical record in 2025: for the first time, all member states met the 2% of GDP defense spending threshold, and the 2035 target has been raised to 5% of GDP (including security-related expenditures). Against this backdrop, Rheinmetall's performance is soaring. 2026 sales are projected to reach 14.5 billion euros, a year-on-year increase of 45%; the order backlog is expected to double to 135 billion euros; and the stock price has accumulated a gain of over 540% in three years. From a broader perspective, Germany's ammunition production capacity surpassing the United States carries symbolic significance far greater than the numbers themselves. Eighty years after the end of World War II, this is the first time Europe has seriously considered the possibility of autonomous defense without U.S. leadership. Germany, the country that signed the surrender agreement and long suppressed its military power after the war, is redefining its role in the European security architecture. Orders have arrived, production capacity is keeping up, talent is pouring