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European Automakers Shift to Defense Production

Financial Times Companies •
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European automakers are converting production lines from vehicles to weapons as car demand wanes. Renault teams with Turgis Gaillard to manufacture drones, while Volkswagen explores converting a plant for Israel's Rafael missile defense systems. This shift addresses underutilized European factories running at 77% capacity utilization, with mounting layoffs across the continent.

Carmakers bring valuable innovation expertise to defense production, having revolutionized manufacturing processes from Ford's assembly lines to Toyota's just-in-time systems. Scotland's shipyards offer historical precedent, transitioning from commercial vessels to warships under BAE Systems ownership. Glasgow's shipyards now produce vessels for Norway, while nearby Silicon Glen pivoted to defense electronics under RTX Technologies.

Repurposing factories avoids shutdown costs and unemployment burdens, yet presents challenges. Weapons production attracts protest attention and requires delicate foreign partnerships. Modern weaponry demands specialized skills not easily grafted onto legacy automotive facilities. Without addressing Europe's industrial trinity of high energy costs, fierce competition, and weak demand, this pivot represents a necessary adaptation for survival.