Are arms, not vehicles, the brand-new financial engine?– DW– 05/13/2025

The Czech Republic has actually come to be the nation with the highest possible per head manufacturing of vehicles worldwide over the last thirty years. 2024 was a document year with greater than 1.4 million made lorries in the nation of 10 million occupants. This is a boost of nearly 4% year-on-year.

However, manufacturing dropped by 7.1% in the initial quarter of 2025.

The primary factor for this was the decrease in need in the West, which was set off by the issues in the European auto market, the sluggish change to electromobility, and United States tolls.

Meanwhile, the nation’s arms market is flourishing.

“The defense industry can become a new engine of the Czech and European economy,” Danuse Nerudova, participant of the European Parliament’s Committee on Budgets, informed DW.

“It can utilize the supply capacities and workforce freed up by the automotive sector, boost economic growth and strengthen our security at the same time.”

Arms as brand-new financial engine?

Petr Zahradnik, a Czech economic expert and expert to the European Economic and Social Committee in Brussels, is rather even more hesitant. “Czech arms factories are experiencing golden times, that’s true,” he informed DW.

Yet, he includes that he does not think that arms will certainly change the auto field as the brand-new engine of the Czech economic situation.

“I also don’t want to see weapons production replace commercial production,” he stated.

Even prior to World War I, the area these days’s Czech Republic was referred to as facility of arms manufacturing. For years, after that-Czechoslovakia was likewise among the globe’s leading arms manufacturers. For years, arms represented about 10% of all Czechoslovakian exports.

Also residential need was driven by the nation’s greatly armed military of numerous hundred thousand males till the late 1980s.

However, completion of the Warsaw Pact– a protection treaty and armed forces partnership in between the Soviet Union and 7 various other Eastern Bloc socialist republics checked in 1955– in addition to the basic disarmament in the very early 1990s, which was gone along with by a considerable decrease in the armed forces budget plan, hit Czech arms makers hard.

Czechoslovakia’s last significant weaponries order was an export agreement for 250 T72 storage tanks to Syria in 1991.

Then, in 1992, Czechoslovakia divided right into 2 specific states, the Czech Republic andSlovakia This likewise brought about a department of the protection market. The manufacturing of storage tanks and hefty equipment was primarily in Slovakia, while the airplane market, the manufacturing of little arms, ammo, radar systems and, most importantly, little arms was mainly found in the Czech Republic.

Not completely effective privatizations, the decrease of Czech support costs to 1% of the nation’s GDP, in addition to the professionalization and downsizing of the military to just around 20,000 soldiers substantially deteriorated the Czech support market in the years after the split.

Growth aspect Ukraine battle

Following Russia’s intrusion of Ukraine in February 2022, Czech arms manufacturing facilities enormously boosted their outcome once more. In specific, the innovation of storage tanks, and the manufacturing of ammo, armed forces lorries, self-propelled weapons cannons, drones, radar tools and gatling gun have actually been flourishing because.

40% of the Czech arms manufacturing facilities’ manufacturing mosts likely to Ukraine, where joint endeavors have actually been developed too.

In overall, as much as 90% of Czech- generated arms are exported. At the exact same time, purchasesby the Czech military are likewise rising.

In 2024, Czech protection costs got to 2% of the nation’s GDP and Czech Prime Minister Petr Fiala revealed that in a couple of years’ time, it will certainly total up to 3%.

New tasks for auto workers

The boom is readied to proceed for the following couple of years. This year, ammo producer STV Group will certainly boost its manufacturing of large-caliber weapons ammo, which it primarily provides to Ukraine, from 100,000 systems to 300,000. The Czech PBS Group likewise intends to increase its manufacturing of engines for rockets and drones.

In turn, the variety of workers in these business is likewise expanding. STV Group is preparing to employ 1,000 added workers in the future. According to its yearly record, the Czechoslovak Group, the biggest Czech arms producer, that includes the Tatra armed forces auto plant in addition to ammo manufacturing, currently utilizes 14,000 individuals.

By contrast, the biggest auto team Skoda-Auto utilizes around 20,000 individuals at its primary plant inMlada Boleslav However, as the much less requiring manufacturing of electrical vehicles will certainly bring about a decrease in the variety of workers in the future, Skoda Auto manager Klaus Zellmer informed the German publish publication Automobilwoche in late February 2025 that his firm, which presently utilizes 41,000 individuals, was preparing to minimize its labor force by 15%.

Many of these workers are most likely to locate brand-new tasks in the protection organization. According to Czech employment companies, they will certainly not need any type of significant re-training when they change markets.

This write-up was adjusted from German.