In a talk with German economics journalists on May 2, the CEO of Rheinmetall explained that "the Bundeswehr lacks everything".
Reaching NATO’s 2% level for defense spending isn’t enough to help Germany’s armed forces rebuild from years of neglect. Rheinmetall CEO Armin Papperger told the Economic Journalists’ Association (WPV) in Düsseldorf on May 2 that Germany needs to add 30 billion euro to its defense budget this year to the 68.58 billion euro already in the budget. Otherwise, the German military will not be able to realize its "Zeitenwende", or Turning Point, which Chancellor Olaf Scholz declared after Russia’s full-scale invasion of Ukraine in 2022.
Papperger points out that Germany had had 4 million shells available to its army in February 2022. Those shells were fired long ago and replacements have gone straight to the front. "We have been able to get almost nothing into our own warehouses in the two years," he said, according to Frankfurter Allgemeine Zeitung. Germany is not alone in this situation, and he claimed that there are similarities in France, Italy, and Spain.
Papperger told journalists that Rheinmetall is prepared to build manufacturing sites within Germany, near Unterlüß, as well as abroad in Romania, Lithuania and elsewhere, to bring artillery ammunition production from 70,000 units per year to 1.1 million. However, like his U.S. counterparts (link), solid orders are required to make this happen. "We want five-year contracts. We won’t run the risk that there is no return on investment," he told reporters. At the same time, Rheinmetall is doubling the capacities of its powder plants and building a new plant in Romania. Rheinische Post notes that the company is build production of 11,000 tons per annum, compared to the largest plant in the U.S., with a capacity of 4,000 tons per annum.
Rheimetall’s outlook is good
The ongoing supply to Ukraine as well as overall European rearmament signals a continued heyday for Rheinmetall that will fuel the company’s expansion globally. The company just won a contract with Lockheed Martin to build the middle sections for F-35 fighters. The replacement for the U.S.-origin Bradley Fighting Vehicle is also in the offing, and Papperger sees that as a potential $45 billion market.
