The Arsenal of Democracy, Rebooted
Written by Kfir Kedem
As tensions increase around the world, defense spending is rising sharply year-on-year. Different allied regions and independent countries have their own advantages when it comes to manufacturing. For example, China has regional vertical integration, whereas the EU has high-quality and reliable cross-border manufacturing. The US, being as large and as rich in resources as it is, can exercise greater national control over its industrial base. The fears of global conflicts between great powers are growing consciously. But if we ever reach the boiling point, how will nations rapidly scale the production of defense systems to stay competitive in an all-out war?
During WWII, governments pushed the largest manufacturers of their countries to step up. Peugeot, in fact, started in WWI by converting its metal mills to weapons manufacturing facilities and, in WWII, produced armored vehicles – later establishing itself as a leading automotive OEM. For the Americans, major car manufacturers took similar steps in the other direction. GM produced machine guns, Chrysler produced anti-aircraft guns, and Ford produced the Willow Run Bomber aircraft – just a few examples among many.
Today, guns are no longer the primary weapon of war. Aerial systems such as drones and missile interception platforms like the Iron Dome are central. The US Secretary of War, Pete Hegsgeth, already set a target for local production of 200,000 drones by 2027. In comparison, China – the world’s largest manufacturer of civilian drones – can retool production to yield 1 billion weaponized drones annually. The Pentagon has already met with American automotive giants to discuss the use of their facilities for arms manufacturing.
With this in mind, Anduril is ahead of the game, producing defense systems in a gigafactory-style facility. They accelerate the speed of war further by constructing facilities that compress the stages from prototyping to manufacturing from years into months. The facility takes inspiration from automotive manufacturing and assembly lines to maximize efficiency and scale, reflecting the speed and scale that Anduril aims to achieve.
Although Europe is not currently involved in active conflicts, Israel is, and requires large-scale production for its Iron Dome components. Meanwhile, Volkswagen has seen a significant revenue drop in recent years, with Chinese EVs flooding European markets and undercutting sales. Volkswagen’s Osnabrück plant, employing 2,300 people, was at risk of shutting down. As a result, Volkswagen signed a production deal with Rafael (an Israeli defense company) to manufacture Iron Dome components at the plant.
It may seem farfetched to bring supply chains and manufacturing conversion back to the WWII era, but Ukraine demonstrated it as recently as 2022. Civilian automotive and hobby factories were converted to produce drones at scale, contributing to their resilience against a larger military power. They leverage commercial off-the-shelf motors, 3D-printed parts, and skilled technicians to build hundreds of drones weekly.
In WWII, Roosevelt called it “the Arsenal of Democracy.” It remains an 80-year-old template that enables countries to convert, pivot, and produce at scale to defend their values on a global stage.
The lesson for today is clear: industrial capacity, not just technology, determines success in modern conflict. Nations that harness civilian manufacturing, automotive-grade precision, and flexible supply chains gain an asymmetric advantage. Anduril shows how designing defense systems for scalable production compresses the cycle from prototype to battlefield. Volkswagen demonstrates how dormant factories can be repurposed to meet urgent defense needs. Ukraine proves that even small nations can leverage civilian capabilities to punch above their weight.
For policymakers and defense planners, the challenge is no longer purely engineering, it is mobilizing supply chains, aligning procurement incentives, and bridging the gap between civilian industry and military demand. The next generation of conflict will favor countries that treat industrial strategy as seriously as weapons strategy. Those who can pivot, convert, and scale rapidly, following the WWII Arsenal of Democracy template, will determine not only who wins battles, but who shapes the rules of global security in the decades ahead.
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