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Germany’s Mittelstand arms itself for a new era

Country’s small and medium-sized businesses are pivoting to defence amid European rearmament

Within days of Russia’s invasion of Ukraine, as Germany’s industrial heartlands shuddered and recession loomed, the boss of 161-year-old engine maker Deutz came up with a plan to turn adversity into opportunity.

“I said ‘what about defence?’,” Sebastian Schulte recalled asking colleagues, thinking that the Cologne-based company’s engines for tractors, diggers and other heavy machinery were a perfect fit for tanks.

“Our engines run 3,000 metres above sea level, in a mine, at 40 degrees celsius or minus 20 — that’s exactly the kind of reliability militaries need,” he added.

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