I suspect that we are all right
We tend to forget that the Luger production continued for more than 40 years. During that time, it went from an unproven design to one of the most common firearms of its era. During the same period, machinery design and tooling improved greatly, driven by two wars and an ever changing labor market.
It is unrealistic to think that the original tooling and machines were in continuous use during the entire production run. The First Lugers were most probably made with movable jigs and fixtures on machines driven by leather belts. After all, no company would commit the funds necessary to make dedicated machinery for an unproven and evolving design, and labor costs were cheap. And as GT noted, the Germans were masters at producing precision tooling. Undoubtedly, improvements in equipment, and increased orders, were translated into improved production techniques and a greater use of dedicated machines...
Regardless, The luger remains as artistry in metal and one of the most precise mass-produced firearms ever made.
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