A look at the armaments industry How Germany's defense companies are reacting to the order boom

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Rheinmetall AG

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Against the backdrop of the war in Ukraine, German arms manufacturers are currently receiving more orders than ever before. Author Wolf von Dewitz describes here what it looks like ...

Rheinmetall has built a factory costing around 100 million euros in Weeze (NRW) to manufacture important components for the F35 stealth bomber. Group CEO Armin Papperger and NRW Minister President Hendrik Wüst (CDU) are celebrating the completion of construction on site today. This example shows that, in view of rising government spending on defense, the arms industry in Germany is booming like it hasn't for a long time. And major players are now investing heavily in expanding their production capacities. Here is an overview of the rapid growth in the sector with selected examples.

Rheinmetall brings automotive workforce into the defense sector

Germany's largest armaments group, Rheinmetall, had a backlog of 62.6 billion euros at the end of March. This includes the order backlog, framework agreements and expectations from other business relationships. At the end of 2021, before the war in Ukraine, this was not even close to half at 24.5 billion euros. Turnover and profits have also been soaring for months and the number of employees is set to rise by 25 percent (to 40,000 people) in the next 24 months. The share price has risen 18-fold since the Russian attack on Ukraine in February 2022. And because the Group's car business is weakening, some of the affected employees are to be transferred to the defense sector. Rheinmetall is expanding its largest site in Unterlüß, Lower Saxony, with a new ammunition factory costing around 300 million euros. As already mentioned, the center fuselage section for the F35 will be manufactured in Weeze. The Group is one of Ukraine's most important arms suppliers, but the whole thing is partly paid for by the German government.

Hensoldt is the expert for the "eyes and ears" of the armed forces

The war in Ukraine clearly demonstrates the importance of electronic warfare. This development is grist to the mill of Hensoldt from Taufkirchen near Munich. The company offers sensors and radar systems that support this. As a result, turnover rose by around 50 percent (to around 2.2 billion euros) in the same period as Rheinmetall. This year, the plan is to generate at least 2.5 billion euros with the help of around 9,000 employees and even six billion euros by 2030. Hensoldt radars are being used in the Ukraine war, for example to protect the population from Russian air strikes. They can also be found in the Eurofighter. The German government also holds a blocking minority of a good 25 percent in the company, which once belonged to Airbus. Over the past three years, Hensoldt has invested one billion euros in a new optronics site in Oberkochen. Hensoldt also manufactures periscopes for armored vehicles and periscopes for submarines.