The Düsseldorf-based arms manufacturer Rheinmetall is planning to set up a joint venture with the US company Lockheed Martin for the large-scale production of warheads and missiles, including armaments for the Patriot air defense system, in Europe. As Rheinmetall CEO Armin Papperger explained in a conference call with analysts last week, talks are currently underway to establish the joint venture, in which his company is aiming for a 60 percent stake.
The background to this is that the production capacities in the USA are not sufficient to cover demand in Europe, said Papperger. "Sometimes you have to wait ten years to get missiles from America, which is far too long." The two partners therefore wanted to establish a European "Center of Competence" for missiles.
For example, the ATACMS, GMLRS, Hellfire, JAGM and PAC-3 missiles could be produced jointly. ATACMS missiles have a range of around 300 kilometers, while GMLRS have a range of 150 kilometers, according to Papperger. The Hellfire and JAGM are air-to-ground weapons, while the PAC-3 is one of the two missiles used for the Patriot air defense system.
The Rheinmetall CEO announced his intention to build up a production capacity of up to 10,000 missiles and the same number of large and small rocket engines per year. The aim is to achieve comprehensive vertical integration.
The Rheinmetall boss estimates that the production line will be ready in 12 to 13 months. Final production will also take place there. Development work will be carried out together with Lockheed Martin, so that IPRs will also be located in Europe. However, the project requires the approval of the US government, which both partners are working on. Papperger expects that after the start of engine production next year and rocket production in 2027, the years 2028 and 2029 will be characterized by the ramp-up phase. After that, there is a sales potential of 5 billion euros if the joint venture's production is fully booked. Rheinmetall is endeavoring to supply as many components as possible to the joint venture.
Lockheed Martin is currently ending the production of ATACMS because the PrSM is being manufactured. It is therefore under discussion to process US contracts in the new factory and thus generate the first one to two billion euros in sales. The plan is to take over the assembly lines for ATACMS directly from the USA, explained Papperger. He predicted that the capacities for the new engine production should be utilized quickly, as Ukraine has a high demand for Patriot missiles.
The Rheinmetall boss put the current demand for missiles at 600 to 800 ATACMS per year, around 2,500 GMLRs, 5,000 Hellfires, 5,200 JAGMs and 250 to 300 PAC-3s.
According to him, the supply chains are currently being set up for production. The idea for this was developed by Lockheed Martin's CEO and himself during the Munich Security Conference. The idea was to give the manufacturers of electronic components a five-year contract and a large down payment.
According to Papperger, European customers have a preference for ATACMS with a range of up to 300 kilometers over the GMLRS with up to 150 kilometers. Long ranges are preferred. In Germany, 500 or 600 kilometers are also being discussed. Ranges that are currently only offered by the PrSM.
When asked about the possible establishment of a Missile Excellence Center, the US arms manufacturer Lockheed Martin stated that the company was working with its European allies to identify opportunities for cooperation in order to meet the global demand for US ammunition and precision strike capabilities.
They want to ensure that any potential collaboration strengthens U.S. manufacturing capabilities, creates jobs in the U.S. and Europe, and accelerates the delivery of these goods. "Any collaboration between our companies is subject to the approval of the U.S. and German governments," Lockheed Martin emphasized. As negotiations are still ongoing, all details communicated are premature and unofficial.
Lars Hoffmann
