Rheinmetall anticipates major orders for special assets.
The German military force, Bundeswehr, is set to get billions in additional funding for a "turnaround," much to the delight of arms manufacturer Rheinmetall. With a majority of the money anticipated to end up in Rheinmetall's possession, the company's head expresses the need for more resources for the troops.
Armin Papperger, the head of Rheinmetall, anticipates significant orders from the German government's 100 billion special fund. During an interview with "Süddeutsche Zeitung," Papperger stated that they "can assume we will ultimately receive between 30 and 40 billion euros from the special fund." This funding is designated for areas like air defense, vehicles, ammunition, their share of the F35 program, and more.
The likelihood of Rheinmetall receiving a significant portion of the 100 billion euro program in Berlin is attributable to the company's sheer size. "If we had received the smallest share, then we would have done something wrong," says Papperger. The 100 billion euro program for the Bundeswehr was instated by the German government shortly following Russia's attack on Ukraine in February 2022. However, experts estimate that the budget will be depleted by 2026.
Papperger Outlines Options
Given this timeline, Papperger urges the German government to secure ongoing funding for the Bundeswehr. He outlines two potential methods: "You can take on new debt or reallocate money from the budget." With no other option, as per Papperger, "either one or the other" must be undertaken to prevent the "turnaround" from ending in 2026 and leaving the country worse off than before.
In this scenario, Germany would possess more military equipment, but would struggle to cover the costs of its deployment. Additional personnel would also be essential, but it's ultimately up to politicians to determine whether to break the debt limit or reconfigure the budget. "Politicians have to solve the problem," says Papperger.
To compete with countries like the United States in the military arms industry, Papperger suggests that large European arms makers must unite. As the CEO of Rheinmetall, he advocated for a takeover of the Munich-based tank manufacturer Krauss-Maffei Wegmann (KMW) with Rheinmetall six years ago. But now, KMW is partnered with the French arms company Nexter. He doubts that "France would support a takeover by Rheinmetall today," despite remaining "open to anything."
There are no present negotiations between the two companies.
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The German Defense Ministry's increased budget for the German Armed Forces could lead to significant orders for Rheinmetall, given its expertise in the defense industry, specifically tanks and armor. Armin Papperger, the CEO of Rheinmetall, is optimistic about receiving a portion of the 100 billion euro fund allocated for military modernization, potentially up to 40 billion euros. The funds will be used for various defense sectors, including vehicles, ammunition, and air defense, among others.
Source: www.ntv.de
