Hi, first post in forever.
I like a lot of the suggestions here. I've really wanted to see a more industrial-focused Germany for a long time, and while you sort of had that with Bismarck's Germany in Civ IV with industrious+assembly plant, the late appearance of the UB and really specific trait (just making wonders/forges(?) faster) made it seem more like lip service than an actual industrial powerhouse.
Of course, since it seems like we'll always have Panzer as a German UU, representing period-appropriate German industrial dominance would risk clumping a lot of the benefits in the mid-late game, which is usually a terrible idea for balance reasons. So I think an ability that works just as well on turn 200 as turn 20 would be ideal. Which leads me to...
The "Babylon but with GEs" idea is wonderful. Maybe a bit derivative, but nice flavor-wise. That has the benefit of not over-focusing on later (particularly WWII) Germany that many American representations of Germany tend to fall into, and would keep the benefits dispersed more-or-less evenly throughout the game, which was a high priority to the dev team. I really do like the extra hammer from production buildings idea too; don't really know which I like more.
On the question of whether Germany is currently balanced or not, it really depends on the game you're playing. Of course you're going to have to war to get any use from the German specials (and that's the case with a number of civs). But on top of that, you have the problem of the UA being very dependent on game rules. Not just "barbs off" or "raging barbs," but map size, map type, your starting/target landmasses, game speed, number of civs, number of city-states, and most of all, difficulty. I started on Prince and quickly moved up to king (Pangaea, since ocean screwed with the AI back then even more than now) on epic speed, and found Furor Teutonicus to be pretty overwhelming. I could build a couple of warriors/spears, take a couple policies in Honor, and then concentrate my cities on infrastructure and expansion (this is key) while I steamrolled everyone I could find with converted barbs. Being able to build up a competitive army with such minimal hammer investment made things pitifully easy. Even given how easy warfare was back then (and still is, largely), FT made a huge difference.
Then I moved up to Emperor and Immortal, started playing normal speed, and started doing less land-heavy maps from time to time. Suddenly, I could hardly ever convert more than one or two barbs, because the AI was doing so much spawn busting and barb hunting that there were none left over for me to convert. And having only 2-3 50/50 coin flips, it wasn't unlikely that I'd get nothing and waste time with the units I'd built that could be exploring or fighting someone else. That, to me, is the real problem with Furor Teutonicus. I love the flavor, and when it works, it's amazing, but playing to that strength really limits your game options.
Which, of course, just makes me want an industry-based Germany even more.
As an aside (because this post needs more words), I wouldn't be opposed to a culture-based bonus that kicked in around Renaissance. Germany was one of the Western world's greatest centers of art for a good long while. I mean, make a mental list of the preeminent pre-Romantic classical composers you can think of and you'll see what I mean. Perhaps an ability that gave each culture-producing building/wonder in each city a small (5-10%) culture multiplier so you could really take off once you reached museums or if you invested in some wonders. That would make it era-appropriate and keep it from being too much like the other culture-based UAs. Particularly, it would keep it from butting up against Ancien Régime's early but limited and linear culture bonus.
In that case it would be better to focus on leader/civ abilities, or even unique buildings, instead.
from every strategic resource and 25% 
from harbours and lighthouses, 
city state bonuses are doubled.
