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Reuters
6 days ago
- Automotive
- Reuters
Franco-German MGCS tank project speeding up, Rheinmetall CEO says
UNTERLUESS, Germany, July 24 (Reuters) - The Franco-German MGCS main battle tank project, which has stalled for years, is speeding up and has political will on both sides, Rheinmetall chief executive ( opens new tab Armin Papperger said on Thursday. "This is what politicians want, but also industry," he told reporters during a factory visit in Unterluess, in northern Germany, which was attended by the French and German defence ministers. Berlin and Paris in 2017 agreed to work on a Franco-German tank to succeed the German Leopard 2 and the French Leclerc, but the project had been hit with disagreements and delays. Efforts to speed up production come at a time when Europe is ramping up defence production, feeling more vulnerable after Russia's invasion of Ukraine in 2022 and questions over the U.S. commitment to the NATO military alliance. A production concept will be developed over the next few months together with the French company Thales ( opens new tab and KNDS. "Then we will move into a prototype phase, and after this prototype phase, we will hopefully move relatively quickly into a production phase," Papperger said.
Euractiv
07-07-2025
- Business
- Euractiv
Rheinmetall sees bundled Europe-wide military orders as path to better prices
Rheinmetall CEO Armin Papperger told Euractiv that Europeans should pool together more military orders to avoid skyrocketing prices and achieve better economies of scale, and the EU should review its environmental rules. Part of this story was first published in Firepower, Euractiv's defence newsletter. Subscribe here. Papperger, visiting Brussels last week, said that a lead nation approach has worked well with ammunition and air defence systems, in which one country coordinates a larger order on behalf of a larger group of purchasers. He contended that the same 'Europeanisation of contracts' should be used for vehicle systems as well. 'We need to bundle [orders] so that fair prices can be achieved,' Papperger told Euractiv after meeting Ursula von der Leyen along with other CEOs from the German state of North Rhine-Westphalia on Wednesday. The European Commission and NATO have both been pushing countries to place joint orders together to fight price inflation and give industry a long-term perspective for investment into extra production capacity. Prices for 155mm artillery ammunition, for instance, have quadrupled since the beginning of the war in Ukraine as exploding demand strained supply chains for critical components such as TNT. The German munitions giant has been one of the biggest beneficiaries from the surge in demand in arms in the past few years, with increase in orders, visibility on the battlefield and expansion of factories. Rheinmetall received its largest order of 155mm ammunition in history last week. Papperger didn't say so explicitly, but plenty of defence industry executives have tried to make clear in recent years that large, long-term contracts make it much easier for companies to invest in expanding production facilities and forging tighter relations with suppliers. Rheinmetall's prominence in Europe's race to make ammunition and other types of defence equipment was underscored last year when Papperger was the target of an assassination attempt. Environmental rollback? In the spirit of giving defence firms more leeway to expand production capacity in Europe, Papperger and some fellow CEOs lamented the restrictiveness of the EU's REACH chemical regulation. He said exemptions from the rules are needed 'to be able to move faster'. The regulation has come in for stiff criticism from the defence sector over provisions that would ban certain components such as lead in bullets. While the lead ban would not apply to ammunition intended for the military, all types are made on shared production lines and arms makers say banning components from certain bullets would impact production capacity. Papperger said he also lobbied for a new raft of industrial subsidies and incentives – modelled on the EU's just-expired ASAP ammo programme – to boost the production of long-range missiles. ASAP's core is replicated in the European Defence Industrial Programme (EDIP), still under negotiation . Boosting investment Besides institutional funding programmes directly initiated by the EU, a wider discussion about encouraging private investment in the industry is still ongoing. 'People always talk about this, but in my opinion, it is not yet clearly defined that investment is also needed in the defence sector,' Papperger said, adding that it is important to make investments in the defence market attractive. EU leaders have been encouraging the European Investment Bank (EIB) to relax certain rules in order to allow for investments in a broader range of defence products. At the end of June, the EIB announced record new financing of up to €100 billion in 2025, with as much as 3.5% for defence investments – compared to just €1 billion in 2024. However, the EIB's defence investments remain limited to 'dual-use' purposes, meaning products must also serve civilian functions. (bts)
Euractiv
04-07-2025
- Business
- Euractiv
FIREPOWER: An intermural EU brawl over defence policy
In today's edition: SAFE update, Rheinmetall on bulk orders, EU budget ambitions. Euractiv is part of the Trust Project Take a free trial of Euractiv Pro to get FIREPOWER in your inbox. Good morning and welcome back to Firepower, The EU has been muscling its way into military matters in a major way over recent years. Sidelined in the process has been the European Parliament, with MEPs so far mostly stuck looking on as key capitals and the Commission reshape defence policy for the bloc. But now the Parliament is fighting back. Sources tell Firepower that a widely anticipated legal challenge to the EU's €150 billion SAFE joint procurement programme will be announced on Monday. Parliament negotiators are also digging in their heels over strict rules on non-European defence firms participating in the Commission's flagship European Defence Industrial Programme (EDIP), and preparing for a showdown over the next seven-year EU budget (more on that below). The stakes? Whether MEPs will have any sway in shaping the EU's moves into the defence space. Stay tuned. Shortages of key explosives like TNT has become a major bottleneck holding up European efforts to boost ammunition production. Opening new production lines is costly and requires gruelling permitting processes. Some companies are reopening mothballed Cold War-era factories, but retrofits take time there as well. More here . Rheinmetall CEO Armin Papperger told Firepower that Europeans should pool together more military orders to avoid skyrocketing prices and achieve better economies of scale. Papperger, visiting Brussels on Wednesday, said that a lead nation approach has worked well with ammunition and air defence systems, with one country coordinating orders on behalf of a larger group of purchasers. BUNDLING: He contended that the same 'Europeanisation of contracts' should be used for vehicle systems as well. 'We need to bundle [orders] so that fair prices can be achieved,' Papperger told Firepower after meeting Ursula von der Leyen along with other CEOs from the German state of North Rhine-Westphalia. The European Commission and NATO have both been pushing countries to place joint orders together to fight price inflation. Prices for 155mm artillery ammunition, for instance, have quadrupled since the beginning of the war in Ukraine as exploding demand strained supply chains for critical components such as TNT. ON THAT NOTE, Rheinmetall announced the largest order in company's history yesterday. An unspecified European NATO country finalised a multi-year deal for 155mm artillery ammunition and bimodular propellants worth several hundred million euros. LONG-TERM COMMITMENT: Papperger didn't say so explicitly, but plenty of defence industry executives have tried to make clear in recent years that large, long-term contracts make it much easier for companies to invest in expanding production facilities and forging tighter relations with suppliers. During his stop in Brussels, Papperger said he also lobbied for a new raft of industrial subsidies and incentives – modelled on the EU's just-expired ASAP ammo programme – to boost the production of long-range missiles. ASAP's core is replicated in the European Defence Industrial Programme (EDIP), still under negotiation. On your radar EDIP, SEASON THREE. Trilogues started this week on EDIP, with a first technical talk yesterday and another this morning. Negotiators from the Parliament and the Council hope to reach a deal by October, but at least two substantive obstacles stand in the way: Disagreements over rules for non-European countries participating in the programme, and the (diminutive) size of the programme's proposed budget, just €1.5 billion. ARTILLERY AMMO FOR UKRAINE. 'We will deliver 2 million shells to Ukraine by the end of the year,' von der Leyen said on Thursday. Her remark anticipates that EU countries will end up coming through on the artillery funding initiative pushed by Kaja Kallas, even though ( last we checked ) it'd only collected pledges for about two-thirds of the cash needed to buy that many rounds. The Europeans will now be racing to increase military support to Ukraine, with reports that the US will halt its own aid . ICELAND WANTS DEFENCE PARTNERSHIP. Reykjavík is the latest capital looking to negotiate a 'Security and Defence Partnership' with the EU, a key prerequisite for accessing joint weapons procurement contracts under the EU's SAFE programme . Eight other countries have already signed such deals, to increase cooperation in areas including cyber defence and military exercises. EUROPE GOES QUANTUM. The Commission pitched a quantum strategy on Wednesday to develop and commercialise the EU-made technology key for security of communications and encryption, as competition from the US and China heats up. Cash Corner €100 BILLION FOR DEFENCE IN THE NEXT EU BUDGET? That's how much EPP MEP Christophe Gomart, the co-chair of the Security and Defence Committee, is hoping to see in the EU's next seven-year budget. He told Firepower that the EU could break 12 digits for defence if EU countries increase their direct contributions for a defence budget in the MFF. Current contributions to the EU budget are set at about 1% of GNI. Some back-of-the-envelope maths: If countries agree to increase that contribution by 0.5 percentage points to 1.5%, that works out to around that extra €100 billion. NOT THE FIRST IDEA. Other prominent voices have previously pitched the same big, round figure for defence. Among them? Current Defence Commissioner Andrius Kubilius, former Defence Commissioner Thierry Breton, the chair of the main European defence industry lobby ASD and several Eastern European countries. BUDGET FIGHTS COMING UP. The €100 billion idea is not outside the realm of possibility, considering Ursula von der Leyen's ambitions to make defence a top EU priority. Defence industry representative David Luengo told Firepower that the figure 'makes sense in a security paradigm shift' and called high-level discussions around it 'serious'. Capitals are divided on WHETHER TO INCREASE THE OVERALL EU POT, a decisive factor in the Commission's draft budget, which will be presented on 16 JULY. Among the other options to increase the budget: more re-purposing of EU civilian and social funds – or possibly taking up more EU debt, a controversial step taken during Covid, and for the EU's new €150 billion SAFE joint military procurement programme. But sources tell us there's nothing close to consensus, at least for now, meaning the budget is likely in for lengthy and difficult negotiations. RECAP: The 2021-27 EU defence & security budget includes just €16.4 billion, or about €2.3 billion a year (although EU countries altogether spent €326 billion on defence in 2024 ). By way of comparison: The Pentagon pitched nearly three times as much for next year, a whopping $961.6 billion (€818 billion). How much is 5% of GDP? Leaders are grappling with just how much 5% of GDP is after pledging their countries to spend that much at last week's NATO summit. For Canada, it comes to around C$150 billion (€93bn) per year, according to PM Mark Carney. That's almost a third of the country's yearly budget of C$449.2 (€281.31billion). In Germany, Europe's biggest economy, each percentage point of GDP amounts to around €45 billion, according to Chancellor Friedrich Merz. That means 5% would come in at €225 billion per year, or a full 45% of Germany's current €476.8 billion government budget. Credit rating agency Moody's warned that because of NATO's higher spending pledge, the debt-to-GDP ratios could rise by 3.5 to 5 percentage points by 2029 for Europe's four largest economies: Germany, the UK, France and Italy. News from the Capitals TURKEY's air force could see major changes in the coming years. Sales of Eurofighter jets could be approved soon , according to the UK, part of the consortium behind the planes. Germany, another member, has previously been blocking the sale. The US ambassador to Turkey, meanwhile, said the dispute with Turkey over F-35 fighters could be settled by the end of the year. The US cancelled sales of F-35s to Turkey after bought Russian air-defence systems. GERMANY plans to deepen cooperation with Israel, including to develop a ' cyberdome ' to defend the country against drones and cyberattacks. German Interior Minister Alexander Dobrindt described the proposal as a 'holistic' system that combines military and civil defence. Dobrindt also pitched increased cooperation between German intelligence agencies and Israel's Mossad, and a new German-Israeli centre for cyber research. UKRAINIAN defence companies plan to open production lines in DENMARK, under a €67 million deal inked on Sunday . The idea of integrating the Ukrainian defence industry into the European market is gaining serious momentum across Europe, and has been named as a key priority for the Commission and Kyiv. Just what it looks like still needs more definition, though. For EU defence chief Kubilius argued back in May that 'Ukraine can benefit from EU production capacity' – while the EU will benefit 'massively' from 'lower production costs'. European Union Next rounds of EDIP technical talks tentatively scheduled for 11, 15 and 17 July; no political trilogues scheduled before September Council EU-Moldova Summit, 4 July, including to 'take stock' of security and defence cooperation ECOFIN Council, 8 July, approve 15 EU countries to activate the national escape clause to increase deficits by 1.5% of GDP each year over the period 2025-2028 to spend more on defence Political and Security Committee, 8-9 July Coreper II, 9 July The Danish Council presidency updated its schedule to move a defence council gathering from 11 November (Armistice Day) to 28 November, and added a second ministerial, 6 October The Agenda of António Costa will be available here European Commission EU Stockpiling Strategy, 8 July, presentation by Commissioner for Social Rights and Skills, Quality Jobs and Preparedness Roxana Mînzatu Andrius Kubilius attends the Ukraine Recovery Conference in Rome, 10-11 July. Agendas of Commissioners will be available here European Parliament Plenary, 7-10 July, with EU defence chief Andrius Kubilus on 7-8 July and a presentation of the Commision's Stockpiling Strategy to MEPs on 9 July. You can find the full agenda here NATO US Army Gen. Christopher G. Cavoli hands over role of NATO's Supreme Allied Commander Europe (SACEUR) to US Air Force Gen. Alexus G. Grynkewich, 4 July The Capitals Emmanuel Macron in the UK, 8-10 July, on a state visit where he will discuss the two countries' relationship on defence at the 37th Summit co-chaired by UK PM Keir Starmer Macron and Starmer will also hold a 'Coalition of the Willing' meeting in the UK on 10 July Other events EESC Public debate on Defence-related investments in the EU budget, 4 July, watch here CSIS event – Denmark's role in European and Transatlantic Security, 8 July, watch here RUSI webinar – Addressing the persistent threat to subsea cables, 10 July, watch here Thank you for reading, Firepower was brought to you by Euractiv's defence team, with additional reporting from Maximilian Henning and Nicoletta Ionta. You can find the rest of our coverage here. We want to hear from you: tell us what you think and what you know! We're at defence@ and each team member is available at Have a nice weekend.
New York Times
04-07-2025
- Business
- New York Times
How a German Manufacturer Is Forging Stronger Ties With the U.S.
On the edge of a former Cold War-era air base, Germany's largest military contractor began assembling components this week for F-35 fighter jets in a gleaming new factory that symbolizes where Rheinmetall sees its future — in aviation and the United States. The factory in Weeze, on Germany's western border, is the latest move by Rheinmetall, a company best known for producing tanks and artillery, to expand its portfolio into aviation and solidify its role in the U.S. defense market, the world's largest. It is also a reflection of the greater role the defense industry is already playing in Europe. 'This is just the start for us,' said Armin Papperger, Rheinmetall's chief executive, adding that the factory had been built to U.S. standards, making it a possible location for further cooperation with U.S. contractors. Rheinmetall, based in Düsseldorf, emerged as a leading beneficiary of the German government's increased military spending after Russia's invasion of Ukraine in 2022. The company reported record growth last year, and its market capitalization has jumped to more than 91 billion euros at the start of July, from some €4 billion in 2022. Last week, members of the North Atlantic Treaty Organization pledged to raise their spending on the military to 5 percent of domestic income by 2030, meaning that even more money will be flowing into the industry. Germany has been focused on making sure that much of its increased military spending stays at home. Nearly half of the €137 billion that Berlin invested in military equipment from 2020 to 2024 went to German companies, according to the Kiel Institute for the World Economy. Another third went to partnerships that involved a German company. Want all of The Times? Subscribe.
The Star
01-07-2025
- Business
- The Star
Rheinmetall seeks sales of up to 50 billion eur by 2030, CEO tells German TV
FILE PHOTO: Armin Papperger, CEO of Germany's Rheinmetall AG, looks on as he visits the company's new F-35 fighter jet parts plant in Weeze, Germany, July 1, 2025. REUTERS/Thilo Schmuelgen/File Photo
