As Europe rearms, German weapons maker Rheinmetall plans expansion

Rheinmetall, Germany’s largest defence contractor, plans to continue expanding its workforce as major military orders continue to pour in from Germany and other countries looking to rebuild their armed forces.

Rheinmetall currently employs around 32,000 people, and chief executive Armin Papperger said on Wednesday that he plans to grow to more than 40,000 workers within the next two years.

Rheinmetall’s business has been booming, the order books are fuller than ever before. Russia’s full-scale invasion of Ukraine, launched in February 2022, alarmed European countries and drove a wave of military spending.

More recently, US President Donald Trump’s return to the White House has prompted European NATO countries to question whether the United States remains a reliable ally and contemplate dramatic new investments in their own security.

Rheinmetall on Wednesday reported record profits from 2024, and forecast continued strong growth in the coming year as military forces around the world seek the infantry fighting vehicles, light tanks, artillery, air defence systems and ammunition that the Dusseldorf-based company produces.

Sales rose to around €9.8 billion ($10.7 billion) last year, 36% higher than in 2023, Rheinmetall announced.

While the military business is picking up strongly, Rheinmetall’s other business as an automotive supplier has been weakening as Germany’s carmakers struggle with difficult market conditions.

That’s prompted Rheinmetall to consider converting some of its auto parts plants to produce military hardware as well.

“We are of the opinion that automotive suppliers hardly have any growth opportunities left in Germany,” Papperger said on Wednesday while presenting the company’s 2024 financial results. “We want to try to convert individual plants and produce defence in these plants.”

Plants in the German cities of Neuss and Berlin would become “hybrid plants,” where production would take place for both civilian and military customers, he said.

Given the industry downturn, “basically, we would have to lay off people in the automotive sector – but we don’t want to do that,” Papperger said.

The majority of Rheinmetall employees will work in the defence sector in the future, he said. “It is quite possible that we will convert even more plants.”

The company now generates 80% of its consolidated sales with military goods.

Profits up, order books full

Rheinmetall’s business became more profitable in 2024 and the operating result soared by 61% to around €1.5 billion, the highest figure in the company’s history.

The company also has record numbers of pending orders from militaries around the world in its backlog, valued at a total of €55 billion, 44% higher than a year earlier.

The size of Rheinmetall’s order backlog, outstanding framework supply deals and scheduled deliveries has more than doubled since Russia launched its full-scale invasion of Ukraine in February 2022.

At the end of 2021, just before the full-scale invasion of Ukraine, Rheinmetall reported an order backlog of €24.5 billion.

“An era of rearmament has begun in Europe that will demand a lot from all of us,” Papperger said.

Bright future for weapons

The military build-up will bring Rheinmetall unprecedented growth prospects for the coming years, the executive said.

For 2025, the Rheinmetall’s executive board expects sales growth of 25% to 30% and a further increase in business profitability.

The company points out that the forecast does not yet take into account “the improvement in market potential” that is likely to result from the developments of recent weeks.

Business seems likely to pick up even more than previously assumed given recent talk about increasing defence spending in Brussels and Berlin.

For this reason, the company said that it would “make adjustments to the forecast if necessary” as the year progresses.

According to the company, Rheinmetall had 27,244 employees last year, 649 more than in 2023.

Source: dpa

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