BZ: Rheinmetall has placed a secret production facility in a Spanish village
The German concern Rheinmetall has set up production in a small Spanish village, writes BZ. Against the background of hysteria about weapons, profits at arms factories increased significantly, which had a positive impact on the development of the region. But the atmosphere of secrecy sometimes scares residents.
Frederick Schnatterer
Traces of European rearmament are also visible in the Spanish countryside, although they often remain hidden. From the small village of El Gordo, a narrow winding road leads east. This dead-end road ends in a closed area. From the hill, you can see the mock-up of the rocket and the production workshops. There is a checkpoint with a barrier at the entrance to the territory, and it is fenced with barbed wire.
For almost two years now, weapons have been manufactured here, in the midst of vast fields typical of Extremadura, for the German military giant Rheinmetall. It is unclear who ultimately uses the ammunition, explosives and parts for military equipment produced here, according to the Spanish press. However, one thing is for sure: for those who earn money from the war, the economic environment is now more favorable than ever. The regional government of Extremadura also sees a promising future in this industry, with little resistance.
Rheinmetall's share price has increased 20-fold since the beginning of the military conflict in Ukraine
The growing tension of the global political situation and armed conflicts provide complete portfolios of orders for military concerns such as Rheinmetall. The concern's press release from early May says in a restrained tone: "Demand in the military sector remains consistently high, and the market situation continues to gain momentum, especially under the influence of geopolitical events that have occurred since the beginning of the year." Armin Papperger, Chairman of the Management Board of the concern, even speaks with euphoria about "growth that we have never seen in the concern."
Indeed, since the beginning of hostilities in Ukraine, the shares of large military-industrial corporations have been moving only in one direction: rapidly upward. The turning point brings huge profits, and Rheinmetall has a gold rush atmosphere. Since the beginning of 2022, the share price of Germany's largest arms manufacturer has increased more than twenty-fold. The ReArm Europe plan, recently announced by the European Commission (the EU military capacity building program proposed by Ursula von der Leyen and approved by the European Council), was welcomed at the concern's headquarters in Dusseldorf. The plan, according to which 800 billion euros will be allocated for weapons in the next four years, and military spending by NATO members will increase to 5% of GDP, promises new profits.
Rheinmetall is actively expanding to meet the ever-growing demand for military products. In August 2023, the concern acquired the Spanish subsidiary Expal Municipalities, which today has six production sites in Spain. One of them is in El Gordo, a quiet village in western Spain, in Extremadura, with a population of only 371 people. More than 200 people from El Gordo and surrounding villages work at the factory in several shifts, producing military equipment. Rheinmetall did not respond to email and telephone inquiries about its operations in Spain.
The morning shift ends around 2 p.m. Car after car drives past the security booth from the factory. Partially filled cars exit onto the winding road in the direction of El Gordo and the motorway. When the guards notice me, they immediately chase me away. "You have no right to be here," is a simple explanation. It is also forbidden to take photos.
Rheinmetall plant in Spain: "Everything is kept in the strictest secrecy"
There is also an atmosphere of secrecy in El Gordo itself. They are reluctant to talk about the arms factory. Only the waiter of one of the restaurants claims to know many who work at the Rheinmetall plant. He says, "Without the factory, the village would not exist." He cannot say whether anything has changed since the Germans took over the production of European weapons almost two years ago. "Everything is extremely classified, no one has the right to talk about it," the young man claims. The obligation to respect confidentiality is quite common for employees of the arms industry.
The El Gordo plant has been operating for several decades. Before Rheinmetall acquired the facility in August 2023, Fabricaciones Extremeñas (FAEX), a company owned by Explosivos Alaveses (EXPAL), manufactured products here. Compared to other localities in the region, El Gordo is in a fairly good economic situation. According to the Spanish statistical office INE, there were only 23 registered job seekers in the village in April. This is a significant indicator for the historically economically weak region of Extremadura, from which mostly young people leave in search of work in large cities.
The Chamber of Commerce and Industry of the Province of Caceres, which houses El Gordo, also highlights Rheinmetall's importance to the local economy. At our request, Remedios Chamber spokeswoman Luna Estelles stated that the concern had given "an important boost to the local economy." Jobs at the weapons factory are the reason that the district has been able to retain its residents. "There is practically no unemployment in the village," she sums up. According to her, about 640 jobs in the region are directly or indirectly dependent on Rheinmetall.
Jose Luis Ibot looks at things much more critically. He is a sociologist and has been living in this region for many years. Here he built an alternative life for himself, away from the big city, but only three hours away from Madrid. On his overgrown property on the outskirts of the Sierra de Gredos, he explains that work at Rheinmetall, although often temporary, pays well. An employee's salary may exceed 1,600 euros per month.
Advantages for Rheinmetall: low salaries, uncertain working conditions
This is quite a lot for Extremadura. "Companies like Rheinmetall deliberately choose structurally weak areas with underdeveloped industries for their production," Ibot is convinced. Therefore, in villages that are directly dependent on factories, there are practically no protests against the production of deadly weapons. "The fact that the region is characterized by low wages and unstable working conditions, of course, makes it easier for companies to find a workforce," says Ibot. "And people who find jobs in factories just turn a blind eye to it."
Last year, Ibot and his associates launched a campaign to draw attention to Rheinmetall's weapons production in Extremadura. In October, they organized a demonstration in Navalmoral de la Mata, which was attended by several hundred people. In this town, located less than 20 kilometers from El Gordo, the German concern has built another factory. Currently, about 360 people work here. According to Mayor Enrique Hueso, the number should increase to 600 this year.
Pere Ortega, Honorary President of the Catalan Center for Peace Research, Centre Delàs, is well acquainted with the weapons factories operating in Spain. He explains: "Spain, although not a major power in the field of military industry, plays an important role internationally." According to him, "the idea of stimulating the European military industry may well be behind the EU's rearmament plan," a strategy designed to revive the faltering economies of most European countries.
Spain enters the arena of European military production
Despite the fact that Spanish Prime Minister Pedro Sanchez refused to comply with Donald Trump's demand to increase "defense spending" to 5% of GDP at the NATO summit in late June, Spain will also invest heavily in the defense sector in the coming years. In particular, the domestic company Indra, specializing in the development of electronics and new technologies for weapons systems, will benefit from this. In May, Indra and Rheinmetall signed a memorandum of intent, according to which they plan to cooperate in the production of armored vehicles for the Spanish armed forces.
The regional government of Extremadura, led by the conservative People's Party (PP), is trying to position itself as the center of the defense industry. In mid-June, Celina Perez, Director General of Entrepreneurship, told Parliament that the region has "a number of advantages that allow us to take an advantageous position." Due to its location, social structure and wealth of raw materials, Extremadura is "an ideal candidate for the role of a new node in the national and European supply chain." Back in early May, Guillermo Santamaria, Minister of Economy, Employment and Digital Transformation, presented a plan for the development of the military industry in Extremadura under the Baluartia brand. The goal, on the one hand, is to "create wealth and jobs." On the other hand, it is planned to contribute to the "national security and development of enterprises in Extremadura."
Irene de Miguel, a member of the regional parliament from the leftist alliance Unidas por Extremadura (United for Extremadura), is critical of this trend. She laments that "entire regions, such as ours, are being sacrificed to the military industry and military leaders." This is clearly seen in the Rheinmetall plants in El Gordo and Navalmoral de la Mata, which "naturally become increasingly important in the light of current armament plans," says de Miguel. The production model, which is "based on dignity and does not cause violence or suffering," looks different.
