“German Armed Forces Must Be Equipped with Material without Delay”

“German Armed Forces Must Be Equipped with Material without Delay” – Claus Ruhe Madsen visits VINCORION

Wedel. Claus Ruhe Madsen, Schleswig-Holstein’s Minister for Economics, visited the technology company VINCORION in Wedel on Friday, April 14, to learn more about the situation in the German state’s industrial SME sector. The minister stressed that the German Armed Forces must be equipped quickly and that there shouldn’t be any further delays in procurement.

In a conversation with Madsen, Stefan Stenzel, managing director of VINCORION, explained the industry’s desire for planability and reliability from policymakers. He also showcased the latest developments in the industry related to, for example, “green defense” and ways to cut carbon emissions.

Procurement Cannot Be Allowed to Drag On

“The defense technology industry is extremely important to Schleswig-Holstein’s economy,” Madsen noted. Germany’s northernmost state is home to approximately 30 companies in this sector that employ roughly 7,000 people and indirectly provide as many as 20,000 jobs. The industry also includes a significant number of industrial SMEs – such as VINCORION.

“The state government wants a good portion of the 100-billion-euro special fund for Germany’s military to be invested here in the North,” Madsen emphasized. “New material for the military must be procured quickly; this is necessary both in terms of security policy and economic policy.” The minister expressed understanding for the fact that it causes problems for the industry when procurement processes take a long time. The industry needs binding commitments in order to plan, Stenzel explained. If equipment is given to Ukraine, for example, it will take up to 24 months to be replaced. This is because material is also sometimes difficult to obtain.

No Stigma When It Comes to Providing Loans

The fact that defense companies have difficulty obtaining loans from banks in times of military threat is not acceptable in this day and age. “There can’t be any stigma associated with this. That would be to disregard the importance of the defense industry to the state. And it would also run counter to our foreign policy and security policy interests.”

This situation was caused by ESG (environment, social, governance) criteria and the EU taxonomy, which imposes new rules on banks when it comes to providing loans. Defense technology must be recognized as sustainable to facilitate financing. Madsen plans to raise the issue not only with banks in the state, but also to continue talks about the potential involvement of the state-owned KfW Bank.

The German Armed Forces’ Investment Backlog Must Be Eliminated

The war in Ukraine has shifted the public’s perspective on the need for a military that is operationally ready and also on the defense technology industry in general, Stenzel told the minister. “In this respect, we can expect that the needed investments in our military will now also be made in Germany as soon as possible.”

Stenzel pointed out that his company still has not received any concrete orders from the 100-billion-euro special fund – even though numerous defense contractors have submitted inquiries. “The special fund has been specifically earmarked for equipment gaps and to replace old equipment. It’s absolutely clear that the defense budget needs to be increased by 20 to 30 billion a year.” This would be the only way to finance the army’s costs, which are rising due to inflation. In 2022, VINCORION was able to hire 79 new employees in Wedel, and will continue hiring this year. The company is also expanding its workforce at the Altenstadt site in Bavaria. “Finding skilled workers for the industry is not easy, however, not in Wedel and not at any of our other sites,” Stenzel noted.

Cutting-Edge Technology Manufactured in Wedel

Stenzel emphasized that SMEs also played a major role in technological development in Schleswig-Holstein. Addressing Madsen, who is also minister for technology, he said, “we design and manufacture hybrid systems for power generation at VINCORION.” This includes electronics and components such as the starter motor for the Leopard 2 tank or the motor that turns the vehicle’s turret. Weapon stabilization is cutting-edge technology that is manufactured here in Wedel. VINCORION is also working on technological solutions in the civilian sector, such as an innovative electronic rescue hoist being developed for its customer Airbus Helicopter, which meets the highest safety standards worldwide.

Climate change is playing a growing role not only in society as a whole, but also in the defense sector, VINCORION’s managing director explained to the minister during his visit. “We are working to make production processes at our company, corporate management, and also our products themselves more sustainable and carbon-efficient,” Stenzel said. The topic of “green defense” is becoming increasingly important, he noted, adding that “as a company, we stand fully behind the goal of reducing the carbon emissions generated by armies such as the Bundeswehr.”

Stefan Stenzel, Managing Director of VINCORION, welcomes Economics Minister Claus Ruhe Madsen in Wedel. (Foto: VINCORION)