On a single day, July 29, the stock price for the company known as Heidelberger Druckmaschinen AG (HDM), a manufacturer of printing equipment, saw a sudden boost of 35 percent. This price spike coincided exactly with the company’s pronouncement that it had plans to venture into the arms producing industry. Unveiling a partnership with Vincorion, a company already established in the sector of security technology, HDM’s CEO, Jürgen Otto, relayed the proceedings. Vincorion is a spinoff from the military tech wing of the East German tech behemoth, Jenoptik and has in its product line Eurofighter combat jet generators among other defense-related items.
CEO Otto was enthusiastic about the dramatic shift in strategy, given the considerable market value of the arms industry, which expands into the multi-billion euros range and is consistently on the rise. This marks HDM’s maiden undertaking in the sphere of arms production, a space which is expected to net the company at the bare minimum €100 million in the span of the coming three years. Comdirect, an arm of Commerzbank, made it clear in their report that this strategic maneuver allows HDM entrance into an arena with higher stakes, impressive profit potential and in sync with Europe’s zeal towards more defence independence.
Deeming it a hearty step towards solidifying HDM’s stand in the realm of critical security technologies, Comdirect paints a long-term picture of a more sturdy and valuable business model. HDM, however, isn’t the only player in the field dancing to this new tune. Many other engineering firms are experiencing a fervent reorientation towards the creation of military supplies in corroboration with the ambitions of the imperialist powers wrestling for global market control. With profits in the civilian sector taking a downturn, partly due to the Europe-US trade spat, several vast corporate entities are pledging allegiance to the arms industry.
Among the companies making strides into military production is ZF Friedrichshafen. The company is in the process of transforming some of its capabilities to accommodate arms production, such as the creation of military propulsion mechanisms. At the same time, Trumpf is venturing into the production of laser weaponry focused on drone defense; thereby entering the high-tech world of military equipment production.
Simultaneously, partnerships for armament production are popping up, as reflected by Continental teaming up with the largest weaponry manufacturer in Germany, Rheinmetall. The collaboration involves the conversion of automobile technology factories into facilities committed to constructing military hardware components. Volkswagen (VW) has given serious thought towards featuring its Osnabrück plant for tank production, a fact which has been backed by confirmation from the company’s higher-ups regarding their involvement in the defense sphere.
These transformations aren’t limited to auto and tech companies. Firms like Bosch, which have experienced talent loss to the defense industry, are dedicating resources to military subcontracting. Even established arms manufacturers are upscaling their output. Rheinmetall, for instance, is turning former auto parts lines into ammunitions and weapons creation units to cater to the rocketing demand. These changes span from Berlin to Neuss.
Similarly, KNDS (a mechanization unit previously owned by Krauss-Maffei Wegmann) is leveraging former railway factories, ones acquired from Alstom, for production of tank components. The same applies to Hensoldt, which has been proactively seeking engineers from the civil mechanical sector to expedite defense-themed electronics and radar systems production.
Big-shot German machine tool builders such as Walter Maschinenbau, Vollmer, Heller, and Fein are also reality-shifting as suppliers of components and industrial machinery winding up in global arms fabrication, even if at times indirectly. CNC machines specially built for the meticulous manufacturing of ammunition, vehicles and weapons are also part of their offering. These machines are not solely confined to Germany but also reach foreign clients.
Heidelberger Druckmaschinen AG once posed as a significant player in the global printing press manufacturing industry catering to the commercial and magazine print sector. Yet, with the boom of digital communication and the widespread preference for online newspapers and magazines, the desire for print products has undeniably dwindled. As attested by another press building enterprise, König & Bauer, the demand for newspapers saw a steep decrease of approximately 70 percent in the decade from 2008 to 2018.
Expansion in the digital printing and packaging segment came as a byproduct of digital retail growth, but the profit margins of yesteryears were far from matched. This shift pushed HDM to diversify its portfolio. In recent timelines, it has extended its production scope to involve new product lines such as charging infrastructures for electric vehicles and consumables alongside automation technologies and robotics.
However, even with such diversification attempts, a steady decline in annual revenues has been observed, dropping from roughly €3.6 billion in 2007 to somewhere in the region of €2.25 billion in the 2024/25 fiscal year. The result is an underutilized production capacity. Upon the announcement of the strategic alliance with Vincorion, CEO Otto emphasized the company’s superior ‘scalability’ – the capacity to augment production volumes without necessarily having to surge investment spending.
In essence, Heidelberg aspires to morph its identity and stance within the industry and onwards to take a solid position as a trustworthy collaborator within the security-related sectors. They are not alone in their pursuit, as we are seeing a clear trend with many engineering firms moving towards the same direction, marking a significant evolution in the scope and nature of the global corporate landscape.
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