Daily Management Review

European defense: has Germany given up?


11/13/2019


After nearly a century of market domination in the world of armament production, Germany has accumulated countless blunders in recent years, to the point that specialists are wondering if and when it will ever stop. Has the anti-militaristic stance of the Germans, active since the end of the last global conflict, finally destroyed one of Germany’s crown jewels?



Deutschland no longer über alles
 
Whether on sea, land or in the air, Germany stood out throughout the entire 20th century as the owner of the finest military technology. Ahead of its competitors and its time in airplane propulsion systems, explosives, armor technology, naval production, U-boot systems, only the military collapse and the starvation of resources kept German industries and scientists from achieving nuclear power: the technology was well underway. Despite dramatic downsizing in military capacity in the immediate aftermath of the conflict, during which Germany was outright forbidden to have an army, the German capacity to develop new weapon systems carried on as if nothing had happened. Still at the turn of the century, Berlin was proving a fierce competitor in every military equipment bid in the world. But that seems to have changed.
 
The sinking U-boot market
 
The most dramatic disaster on the German military-industrial scene is the recent capsizing of giant ThyssenKrupp Marine Systems (TKMS), once a leader in submarine technology and a regular winner of international bids. Defense specialist Taylor Mitchell writes : “it is possible that TKMS has a secret plan up its sleeve to get back on its feet. But given the duration of the crisis, the intense pressure from shareholders for either results or explanations, and the grim future which TKMS is facing, it would be very surprising indeed for headquarters not to have revealed it yet. It is far more likely that the German shipbuilder has driven itself into a dead-end and is showing the last twitches of life.” In recent years, The shipyards have been losing an increasing number of bids, winning some contracts but then finding themselves unable to perform the task and deliver, and resorting to bribery during bids to compensate for technological performance. Most embarrassingly, even domestic productions were delivered flawed to the German Navy, resulting in the entire submarine fleet being out of commission, and with several surface ships which had been so poorly assembled that German naval officers refused the delivery, causing massive national embarrassment.
 
Technological superiority but market irrelevance for armor
 
Despite difficulties on the commercial market, armor is probably the sector of Germany’s military industry which is in the best shape, comparatively. Germany has maintained its capacity to produce heavy armored vehicles which do compete very honorably with foreign counterparts. The Leopard 2 has no reason to blush when compared to an Abrams, a Leclerc, a Merkava or a Challenger tank, although other armored segments are not as glorious. Defense specialist Thomas Newdick writes : “The first batch of upgrades finished on time, and stands out as a rare success story for the troubled German military. Two all-new fighting vehicles for the army—the Boxer wheeled armored personnel carrier, and the Puma tracked infantry fighting vehicle—have both suffered from embarrassing delays, budget overruns and cutbacks.”  However, decades of “going solo” and not optimizing costs have led German armor to by unavoidably overpriced, compared to foreign alternatives, while posting similar performance. As a result, only countries which spend countlessly, such as Saudi Arabia and Qatar, have been able to afford the newest versions of the German Panzer. However, recent agreements and increased cooperation with France should quickly relieve Germany of this commercial handicap and enable it to uphold its armor industry.
 
Airplanes falling out of the sky
 
Germany was a major contributor to the Eurofighter jet fighter - a technology it had spearheaded at the end of WW2, with the Sturmvogel. Unfortunately, the Eurofighter has been in service long enough for specialists to assess the general performance of the airplane - and it’s not good. In 2018, only a microscopic fraction of Germany’s entire fleet of fighter jets was available for operational missions, due to reliability and build issues. Defense reporter Michael Peck writes : “The German magazine Spiegel recently revealed that most of the Luftwaffe’s—the modern German air force’s—128 Eurofighter Typhoons are not flightworthy. In fact, only about ten of the aircraft are ready for operations, Spiegel said. This raises doubts about Germany’s ability to meet its NATO defense commitments.” The figure was assessed as low as four operational jets by competing newspaper Local.
 
Foreign policy and business complexity
 
Of course, the question remains: how did something as indomitable as the German military industry go down? Among the suspected causes, is Germany’s decision to highly regulate arms deals, through which it has almost banned itself from one of its most profitable export sectors. Following a recent decision to fine German firm Heckler and Koch for a small arms deal in Mexico, international reporter Justin Huggler reported that “The Foreign Secretary complained that the German ban, imposed after the murder of Jamal Kashoggi, was damaging British exporters who could not fulfil Saudi contracts because they could not obtain parts from German partner companies. A spokesman for Angela Merkel's government said Germany had no plans to change its policy.“ Intended both as a political means of pressure and a response to corruption scandals and allegations of bribery in arms deals, the decision to regulate the arms market effectively killed the market, instead of restoring its integrity.
 
Chancellor Merkel recently announced forming a partnership with France, so as to integrate and rationalize the European defense market. This decision was welcomed by all sides, political and economic, as it materializes a capacity for Europe to self-defend which had been wished for by many. For Germany, it may be the last ditch effort to survive on a market which it has completely lost control of.