- Mercedes-Benz CEO Ola Källenius says the company’s precision engineering makes it a natural fit for military hardware production.
- Other European automakers, including Volkswagen and Rheinmetall, are expanding into defense production roles.
- U.S. military officials held talks with GM and Ford last month about using factory capacity to produce munitions.
Mercedes-Benz CEO Ola Källenius says the German automaker is open to moving into defense production. Källenius made the comments in an exclusive interview with The Wall Street Journal (WSJ) published Friday. Källenius cited the company’s ability to build high-quality precision machines at scale as a natural fit for military hardware.
“The world has become a more unpredictable place, and I think it is absolutely clear that Europe needs to increase its defense profile,” Källenius told the Journal. “Should we be able to play a positive role in that, we would be willing to do so.”
Mercedes-Benz has supplied military vehicles for decades, but its current defense role remains limited to trucks and G-Class SUV variants. The automaker spun off its trucks division that makes large vehicles for military use in 2021 and remains its largest shareholder.
“What car companies do extraordinarily well, and we’re good at it, is to build high-quality precision machines in higher volumes,” Källenius told the Journal.
Källenius’s comments come as Europe’s defense industry expands rapidly. Volkswagen is in talks with Israeli companies to produce components for Israel’s Iron Dome artillery defense system by 2027, using idle factory capacity. Germany’s largest arms manufacturer, Rheinmetall, announced plans to produce cruise missiles with a Dutch defense technology company as early as this year.
The trend extends beyond Europe. Senior U.S. defense officials in the Trump administration held talks with General Motors and Ford last month about using their factory capacity to produce munitions. Pentagon officials met directly with GM CEO Mary Barra and Ford CEO Jim Farley as the military looked to restock supplies depleted by ongoing conflicts abroad.
Mercedes is under significant financial pressure, making defense an increasingly attractive revenue hedge. The company’s profits nearly halved last year, driven in part by $1.2 billion in U.S. tariff costs. The automaker is losing ground to high-tech competitors in China, its largest market, and has been cutting production capacity.
Källenius said defense-related work would remain “a minor share” of Mercedes’s business compared with its car and van production. But he called it “a growing niche that could contribute also to our business results.”
