In Germany, the delicate shift towards arming automotive subcontractors

Thomas Hirsch has arranged to meet in Berlin, not in Eichstätt, Bavaria, where his company is headquartered. It's impossible to find another day in his diary: the entrepreneur is in high demand in the capital and beyond. His SME, Hirsch Engineering, is one of the few to have made the delicate transition from automotive subcontracting to the defense industry early on. At a time when hundreds of companies in the sector are declaring bankruptcy, relocating, and cutting jobs, the transition to the defense industry is fueling hopes of economic revival, in the face of the sustained decline in car sales, the difficulties of the electric transition, and the relentless competition from Chinese manufacturers.

"I had a turning point in 2020, in the midst of the Covid-19 pandemic, with the shock of supply chain disruptions. The risk of dependency jumped out at me, we had to diversify the business," says the 36-year-old Bavarian entrepreneur, who founded a company in 2016 producing precision mechanical parts, initially for car manufacturers and suppliers. When he started his business in Eichstätt, the idea that the local giant, Audi, could one day falter was unthinkable. The Ingolstadt-based automotive giant, which had ensured prosperity for the region for thirty years, saw its sales and operating margin collapse in just a few years, threatening the existence of dozens of subcontractors.

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