[By columnist Yang Zhi of Observer Network]

The smoke of the Ukraine-Russia war has brought unprecedented business opportunities to Rheinmetall, the German military industry giant (Rheinmetall). This military conflict, which began in 2022, not only reshaped Europe's security landscape but also altered the development trajectory of the arms industry.

In 2024, Rheinmetall presented a remarkable performance: according to its own data, its revenue increased by 36% year-over-year, reaching as high as 9.751 billion euros; operating profit reached 1.5 billion euros, growing by 61%. It is expected that this year's growth rate could reach 25% to 30%.

The company's total order volume has climbed to 55 billion euros, more than doubling compared to before the war. From tanks to artillery, from ammunition to military trucks, Rheinmetall's product lines meet numerous needs on modern battlefields.

Rheinmetall's performance surge over the past two years can be seen as a direct reflection of geopolitical changes.

Revenue chart of Rheinmetall from 1998 to 2024

Orders are pouring in like snowflakes, and governments have signed framework agreements with defense companies to ensure sustainable development. The federal parliament and senate have approved substantial funds reserves... All of this seems to herald the arrival of spring for Germany's arms industry.

To address the current "supply-demand imbalance," while increasing investment and building new factories, Rheinmetall is also looking at the struggling German auto industry, calling on unemployed or soon-to-be-unemployed workers there to join them.

The capital market has responded positively to this trend. Since the Russia-Ukraine war, Rheinmetall's stock price has achieved an astonishing tenfold increase. This rise not only reflects investors' optimism about the company's prospects but also indicates that Europe is entering a new era of arms race.

Of course, Rheinmetall's success is not an isolated phenomenon. It is a microcosm of the overall adjustment in European, especially NATO countries' defense policies.

Under the shadow of war, countries are increasing their military spending, creating huge market space for arms manufacturers. Rheinmetall is one of the biggest beneficiaries of this trend.

It is worth noting that the company's business focus is undergoing a noticeable shift. Currently, 80% of its income comes from the military sector, while its role as a supplier of automotive parts is gradually diminishing.

This transformation not only reflects the company's strategic adjustments but also mirrors the entire industrial sector's response to geopolitical changes.

Why does Germany have reservations about the arms industry?

The Ukraine-Russia war has brought a high-profile moment for Germany's arms industry.

However, not long ago, CEOs of non-defense companies and government officials would avoid being seen in public with Rheinmetall CEO Armin Papperger.

Susanne Wiegand, chairman of Renk, a company producing tank transmissions and naval propulsion systems, also noticed that politicians are once again willing to pose in front of tanks or aircraft. She said, "This was impossible before. It seems that the arms industry has shed its previous dirty image."

Germany's political attitudes toward arms dealers are complex. From left to right: Rheinmetall boss Papperger, former Defense Minister Pistorius, former Chancellor Scholz. Image source: Fabian Bimmer/REUTERS

So why were arms manufacturers and arms deals considered disgraceful in Germany, similar to pornography or gambling, for quite a long time?

It all goes back to Germany's history of starting two world wars and losing both times.

During World War II, Germany's arms manufacturers suffered severe damage. The reason is simple: the Allies viewed them as the main pillars supporting the Nazi regime and military expansion, so they targeted these industries as primary military strike objectives.

After the war, due to concerns that Germany might rise again and pose a threat to neighboring countries and the world, the victorious powers imposed heavy-handed measures on Germany's arms manufacturers again. As part of reparations, many military equipment were disassembled, packed, and transported to the victorious countries (especially the Soviet Union).

This was the immense material loss inflicted on Germany's arms industry during World War II.

However, the Allies understood that material losses alone could not fundamentally defeat the Germans. After all, the Treaty of Versailles also severely punished Germany after World War I, but the Nazis managed to overcome it and returned twenty years later.

Thus, from July 1945 to April 1951, the four victorious powers implemented what was called "denazification" (Entnazifizierung) measures in their respective occupied zones. The goal was to eradicate Nazi influence in social, cultural, journalistic, economic, judicial, military, and political spheres.

In other words, the old state machinery was thoroughly dismantled and rebuilt. Nazi members and militarists were purged from public administration, and ideological "brainwashing" was conducted.

This six-year-long "denazification" movement had a significant impact on German society and people's thoughts, leading to negative views of arms manufacturers and arms dealers among German officials and civilians.

Specifically, this "negative impression" is mainly based on the following two perceptions:

1) German arms manufacturers gave the Nazi regime wings, thus sharing responsibility for the war and its consequences. In other words, many Germans, after being "brainwashed," also believed that Germany's militarism and subsequent defeat were closely related to arms manufacturers;

2) German arms manufacturers profited from the Nazi war machine and cheap forced labor. Many of these laborers were Jewish prisoners, POWs, and forcibly recruited foreign civilians, and their working and living conditions were inhumane. Although these companies were suppressed and weakened after the war, many of their executives did not face legal consequences and felt no guilt.

Take Heckler & Koch, a famous German arms manufacturer, as an example:

The founder Heckler (Edmund Heckler) can be considered a "veteran of the arms industry." He started working at Hugo Schneider AG, a company known for producing anti-tank weapons called "Panzerfaust," in the 1930s; he took over the management of a branch factory near Leipzig in 1940 and joined the Nazi Party that same year.

Historians revealed that over a thousand prisoners from Auschwitz and Buchenwald concentration camps were sent to him to perform forced labor. They were often tortured and abused, and some even lost their lives. In the final days of the war, including Heckler, the company's leaders feared that the workers would testify about the inhumane treatment and abnormal deaths, so they hastily dismissed over a thousand forced laborers, including women.

During the post-war "denazification" review, Heckler was classified as Category IV - "follower" (Mitläufer), meaning someone who nominally participated in or supported Nazi rule, such as paying party dues, passively attending rallies, fulfilling ordinary obligations, etc. Compared to the first three categories ("principal offenders," "major offenders," and "lesser offenders"), "followers" received lighter penalties, including certain reporting obligations, residential and occupational restrictions, loss of eligibility for election, and payment of fines to the "war reparations fund."

In fact, Heckler's "escape unscathed" after the war was largely due to his extremely cooperative behavior when dealing with the Americans.

After the war, Heckler established a company primarily producing civilian products such as sewing machine parts. In May 1955, when West Germany joined NATO and began rearming, Heckler seized this opportunity to quickly recruit personnel from the former Mauser Arms Factory, laying the foundation for the future Heckler & Koch arms company.

Given this history and the public's aversion to war, Germany's political stance toward the arms industry has been either distant or ambivalent. It is rumored that Merkel was also resistant to arms deals.

When the first Ukrainian crisis erupted in 2014, Sigmar Gabriel, then Vice Chancellor and Minister of Economics and Energy, and Horst Seehofer, Chairman of the Christian Social Union in the governing coalition, had a heated debate over whether to "relax" or "prudently handle" arms exports.

Gabriel, a member of the Social Democratic Party, clearly stated that Germany should not be overly hasty in engaging in "business involving death" for economic interests.

This kind of negative attitude toward the arms industry by the government led to two outcomes: first, strict control and complex procedures for arms export approval; second, German arms manufacturers had to operate in other countries and regions to circumvent the country's stringent export controls.

The Germans are a nation with a rather heavy psychological burden, carrying the "cross" of defeat for decades, and some psychological shadows have gradually become a societal "norm." These post-war "aftereffects" do not exist in the former Soviet Union or the United States, where the arms industry is called the "pillar of the nation," and arms exports have always been a source of pride as a foreign exchange earner.

Compared to this, the difference between the two lies in just one thing: defeated nations versus victorious ones.

With the outbreak of the Ukraine-Russia war and the increasingly clear trend of European strategic detachment from the U.S., people have begun to realize the importance of the arms industry to national security.

Peter Leibinger, president of the German Industry Association, pointed out, "Although this change in public perception has only happened recently, at least those involved in the research, production, and defense technology can stop feeling that their work is morally flawed."

Is it really like that? Not necessarily entirely.

Protests occurred at the first match of the German Bundesliga season, with banners reading: "Damn Rheinmetall deal," "20 million bloodstains," "Money first, morality second," and "Morally bankrupt."

Last May, Rheinmetall, which was thriving in its business, offered attractive terms to Germany's famous first-tier football club Borussia Dortmund and eventually signed a sponsorship agreement. Surprisingly, this deal sparked considerable controversy: peace advocates, human rights organizations, and some fans sharply criticized it.

This shows that even today, when attitudes toward "business acumen" have greatly changed, Germany's prejudice against the arms industry has not completely disappeared.

Rheinmetall's historical "blemishes" and reflective attitudes

Germany's defeat also brought varying degrees of "collateral damage" to many domestic companies, with some even being nailed to the "shame pillar" of history. For instance:

Hugo Boss, founded in the 1920s and initially producing men's clothing, nearly went bankrupt during the economic depression. Later, it shifted to producing uniforms for the Wehrmacht, the SA, and the SS, which resulted in post-war repercussions.

Munich-based BMW benefited from Hitler's war plans after the Nazis came to power. Its turnover grew from 32.5 million Reichsmarks in 1933 to 280 million Reichsmarks in 1939. Being a beneficiary of the Nazis, it naturally faced repercussions after the war.

The fate of Porsche is the most dramatic: for Ferdinand Porsche, founder of Porsche, the meeting with Hitler in May 1933 was a turning point. At age 57, he was heavily indebted due to poor management and wanted to use this rare audience to obtain substantial state subsidies from the Führer. Hitler originally intended to allocate all the subsidies to Mercedes-Benz, but eventually decided to give them to Porsche. The company's business began to thrive thereafter, but it also became entangled with Hitler's "chariot of war," resulting in consequences after the war.

History cannot be reversed, but businesses must continue. How should German arms manufacturers navigate their way through history and reality?

To get through and reduce punishment, they have, to varying degrees, attempted to conceal their "disgraceful" histories and distance themselves from the Nazis, making necessary cuts.

Rheinmetall Group is no exception: although it claims to strive for transparency in addressing historical issues, the reality is different.

Cover image of Rheinmetall's anniversary retrospective article celebrating its 125th anniversary

The company's official website published a retrospective article commemorating its 125th anniversary, though it touches on "forced labor" and "survivor memories," it lacks deep investigation and self-reflection. Interestingly, the editor went to great lengths to describe these writings as "deviating from mainstream narratives" (abseits des historischen Mainstreams), making the intent clear.

In fact, Rheinmetall was crucial to the Nazi regime and was therefore fully nationalized, renamed the "Hermann Göring Reich Industrial Combine" (Reichswerke Hermann Göring). Together with I.G. Farben AG and Vereinigte Stahlwerke AG, it ranked among the largest corporate conglomerates in Nazi Germany.

However, the company's website does not mention these relatively "tricky" pieces of information, focusing instead on describing the challenges the company faced during wartime, such as the conscription of large numbers of workers, necessitating the replacement of women and forced labor for munitions production; and complaining about bureaucratic obstacles hindering wartime arms production, etc.

Rheinmetall's other historical "blemish" stems from its earlier ties with far-right groups in Germany.

During the "November Revolution" of 1918-1919, Rheinmetall was involved: it funded the far-right "Anti-Bolshevik League," which participated in the suppression of the Spartacus League uprising and the assassination of revolutionary leaders Rosa Luxemburg and Karl Liebknecht.

In 1933,濒临 bankruptcy, Rheinmetall was taken over by the Nazis and became a "state-owned enterprise." During World War II, the company expanded its production scale and extensively used forced labor, POWs, and prisoners.

Rheinmetall acknowledged using illegal labor but claimed ignorance of the inhumane treatment endured by these individuals. It also sought to "whitewash" itself through "non-mainstream narratives" and other methods.

Rheinmetall's approach is representative of traditional major German enterprises.

"German Elements" in the Arms Industry

The development of the arms industry has undergone a lengthy process from the earliest use of gunpowder to the later standardization, completeness, and series production of armaments.

During the 19th-century industrialization, the Western European arms industry continued to develop. Initially, only a few traditional state-owned arsenals produced firearms. Later, private giants emerged in England, France, and Germany:

The large steel mill of the "Steel King" Schneider family in France undertook a large amount of war materials production, and its shipyards on the Atlantic coast were used to develop submarines and torpedoes.

The construction of warships in Europe was dominated by Britain, particularly Vickers. It also manufactured cannons, ammunition, cars, and airplanes. In the 1920s, Vickers merged with its strongest competitor, Armstrong Whitworth, becoming even more powerful.

As a rising power, Germany's enterprises and scientific achievements also left a significant mark in the development of the arms industry. At that time, the representative of Germany's arms industry was Krupp, known as the "foundry of cannons of the German Empire."

Initially, it earned substantial profits by producing seamless steel castings for railways. Later, during the Franco-Prussian War of 1870/71, Alfred Krupp's steel breech-loading cannon (C/64/67 type) had a range exceeding 4 kilometers (more than double that of conventional cannons at the time), with a high rate of fire (10 rounds per minute) and precision, causing devastating destruction in the Battle of Sedan. Although the French army had an advantage in the rate of fire with the Chassepot rifle and the mitrailleuse machine gun, they could not withstand the onslaught of the Prussian breech-loading needle gun.

Workshop of Krupp producing steel breech-loading cannons, which made the company renowned internationally (1904). Image source: ullstein bild

Krupp not only manufactured guns and cannons but also excelled at building relationships.

The company had excellent relations with the imperial government and the Kaiser himself, and lacking strong competitors in the field of cannons, it gained almost monopolistic status in Germany's arms production. Its products even reached China.

However, influenced by militarist propaganda, the impact of the arms industry on the entire national economy was long overstated. For example, in 1907, Germany actually had less than 2% of its workforce engaged in war materials production.

Today's historians generally believe that large arms manufacturers did not play a decisive role at the outbreak of World War I, but cooperation between the military and the economic sector indeed became increasingly close.

An outstanding example is Germany's chemical industry:

In 1915, just a year into World War I, the German army faced a shortage of ammunition due to the Allied blockade of nitrate supplies. As is well known, nitrate is an indispensable raw material for manufacturing gunpowder and bombs.

At this critical juncture, fortunately, chemists Fritz Haber and Carl Bosch had developed the ammonia synthesis method (Ammoniaksynthese) before the war. This breakthrough process not only enabled large-scale production of artificial fertilizers (essentially an agricultural revolution) but also allowed for mass production of nitric acid.

Through joint consultations and concerted efforts among the military, chemical companies, and the scientific community, BASF, then a chemical giant, utilized national funds to build large-scale industrial production lines, salvaging the German army's predicament and allowing the war to continue.

In essence, it was Germany's chemical industry that temporarily altered the course of World War I.

Another example of chemical industry influencing the battlefield is poison gas production: Haber's institute developed various types of poison gases, which were produced by Bayer. The first deployment of poison gas on the battlefield was in Ypres, northern Belgium, in 1915.

Moreover, both sides needed chemists to find scientific alternatives to blocked materials. For instance, the Allies urgently lacked chemicals and optical products, while the Central Powers faced shortages of raw materials. Thus, the chemical industry acquired a new military status and foreshadowed the imminent loss of its dominant position in the arms industry by steel manufacturers.

The two World Wars are referred to as "industrialized" wars and serve as "testing grounds" for converting civilian industrial innovations into military applications.

In 1939, just before the outbreak of World War II, the first jet fighter developed by Heinkel (He 178) successfully completed its maiden flight. Additionally, it produced the world's first military aircraft equipped with an "ejection seat."

Germany's rocket technology once led the world: in 1944, Germany's "V-2" rocket became the first practical application of this technology, causing significant psychological pressure on the British and nearly altering the outcome of World War II.

During World War II, the industrial sector unprecedentedly transformed into suppliers of war materials. Compared to World War I, decision-making authority for arms research and production was further centralized within a joint department comprising the government, military, industry, and research institutions.

In the later stages of the war, the overlapping institutions of Nazi Germany severely affected the efficiency of the wartime economy. In contrast, the United States perfected the collaborative model of the "military-industrial complex." Ultimately, traditional arms giants like Vickers and Krupp in Europe gradually fell behind.

The Potsdam Agreement signed in August 1945 stipulated the so-called "four Ds" transformation of post-war Germany: demilitarization (demilitarisation), denazification (denazification), decentralization (decentralisation), and democratization (democratisation).

Germany's arms industry was almost dismantled during the "demilitarization" process. It wasn't until the mid-1950s, when West Germany integrated into the West and began rearming, that the German arms industry slowly regained its vitality.

Germany's strict arms export regulations

In Germany, military materials include not only weapons and ammunition but also transport vehicles, navigation technologies, and defensive devices. The Federal Defense Forces (Bundeswehr) itself does not produce but participates in testing weapon systems and training allied forces.

Article 26 of Germany's Basic Law (Grundgesetz) consists of two clauses: First, the initiation of aggressive wars from German territory is prohibited, meaning any unconstitutional behavior will be punished. Second, weapons used for war must be approved by the German government to be manufactured, transported, and put into use.

In addition to the Basic Law, arms exports must comply with the Foreign Trade Act, the Foreign Trade Ordinance, and the War Weapons Control Act. Among these, the export of war weapons must adhere to the War Weapons Control Act, while other military materials are governed by the Foreign Trade Act.

The German federal government's policy on arms exports can be summarized as follows:

· Human rights considerations: When deciding whether to approve the export of weapons and military equipment, the human rights situation in the destination country and end-user country is a key consideration factor.

· End-use control: Effective measures must be ensured to keep weapons and military equipment with the final user who ordered them. A comprehensive review and assessment of the end-use will be conducted before approving the export.

· Exports to the EU, NATO, and their allies: Generally unrestricted, unless there are special political reasons.

· Exports to third countries: Follow a restrictive policy. Unless there are special diplomatic or security policy interests, approval for exporting war weapons is not granted.

· Small arms: Principally no longer approve the export of small arms to third countries.

· Conflict areas: Do not approve the export of weapons to countries involved in armed conflicts or at risk of armed conflict.

· Sustainable development: Consider whether excessive military spending will seriously harm the recipient country's sustainable development.

· International obligations: Consider the recipient country's performance in counter-terrorism, compliance with international obligations, arms control, and disarmament.

These principles reflect Germany's cautious and restrictive approach to arms exports, emphasizing factors such as human rights, conflict prevention, and international obligations.

However, contradictions with these principles often occur in practice. For instance, despite their poor human rights records, Saudi Arabia, Egypt with severely flawed democratic structures, and Israel, a major participant in the conflict, are recipients of German arms. Therefore, opposition parties in Germany and media opinion frequently criticize the government's arms export practices.

According to official data, in 2024, the German federal government approved record-breaking arms exports totaling 13.2 billion euros, including 8.1 billion euros worth of war weapons and approximately 5.1 billion euros worth of other military equipment.

The main reason for the record-breaking export volume is the Ukraine-Russia war: arms exports to Ukraine amounted to 8.1 billion euros, accounting for 62% of all approved exports.

Conclusion

The Roman statesman and philosopher Cicero, who was well-versed in rhetoric, left us with the thought-provoking insight that "the whole world is a madhouse," and also provided arms merchants with the adage "if you want peace, prepare for war" (Si vis pacem para bellum) as a recipe for wealth.

The Ukraine battlefield seems to confirm this ancient maxim.

Nowadays, Western mainstream media and peace advocates find themselves in a dilemma: without the continuous "military aid" from Europe and America, Ukraine might have disappeared from the map long ago.

In other words, without the "murderous weapons" they disdain, the "peace and freedom" they extol and strive to uphold might no longer exist. Therefore, for them, the "defense of democracy and freedom" is no longer confined to the Hindu Kush mountains of Afghanistan but has extended to Kyiv, Kharkiv, or Kherson in Ukraine.

In the bustling arms trade today, German society is asking: Can profiting from arms truly be morally consistent? Isn't this a surrender to realpolitik?

This is also the warning issued by the veteran activists of Germany's "1968 student movement" advocating peace and the young protesters of "Fridays for Future."

Bitterly, the conclusion is: the world still depends on weapons in the foreseeable future.

Photo of a "non-violence" art installation in front of the German Chancellor's office. Deutsche Presse-Agentur.

Uwe Bork, a German journalist and writer, commented: "We must never regress to a time when war is considered a legitimate political tool. Investing in arms may fill my bank account, but it is more likely to keep me awake at night. Profits extracted amidst the roar of cannons are ultimately stained with blood."

He suggested that given Germany's recent approval of a multi-billion-euro plan to strengthen its defense, why not nationalize arms production and treat it as a public service with enhanced regulation? This might be more appropriate.

Walter Benjamin, a German philosopher and essayist who experienced both World Wars and was an Ashkenazi Jew, fled Paris in 1933 to escape the Nazis. Seven years later, when the German army invaded Paris, France fell. He had to flee again and committed suicide near the Spanish border town of Portbou.

Before his death, he once said about Cicero's "if you want peace, prepare for war": "Those who desire peace should talk about war—not to prepare for it, but to warn of its horror and suffering."

This article is an exclusive piece from Observer Network, and the content purely represents the author's personal views, unrelated to the platform. Unauthorized reproduction is strictly prohibited; for permission, please contact the author. Follow Observer Network on WeChat (ID: guanchacn) for daily interesting articles.

Original: https://www.toutiao.com/article/7488562295279256103/

Disclaimer: The views expressed in this article are solely those of the author and welcome your opinions below by clicking the "Top" or "Downvote" buttons.