With wars raging in the Ukraine and elsewhere, orders for equipment from German defence contractors are overflowing, with many companies planning to substantially expand their workforce and make major investments in their facilities.
Rheinmetall, Germany's largest defence contractor, is one of Ukraine's key arms suppliers, with some of the costs covered by the German government.
It has built a new factory to the tune of around €100 million to make key components for the F-35 stealth bomber, whose main contractor is the US defence giant Lockheed Martin.
Rheinmetall is celebrating the opening on Tuesday of the F-35 parts plant in North Rhine-Westphalia (NRW), Germany's most populous state, with its chief executive Armin Papperger and NRW's Premier Hendrik Wüst.
The company is also expanding its largest site in the state of Lower Saxony with a new €300 million munitions factory. The midsection of the F-35 fuselage will be manufactured there.
Rheinmetall had a backlog of €62.6 billion at the end of March, including orders, framework agreements and expectations from other business relationships. This is more than double the €24.5 billion recorded at the end of 2021, before the Ukraine war began.
Revenue and profits are also soaring, and the workforce is expected to grow by 25% to 40,000 within two years. Since Russia's attack on Ukraine in February 2022, the company's stock price has increased approximately 18-fold.
Still, its automotive supply sector is struggling, though some of that workforce is expected to transition to the defence sector.
Radar: Hensoldt
The Ukraine war has underscored the importance of electronic warfare, benefiting Hensoldt, a sensor and radar systems provider based in Taufkirchen near Munich. Revenue has increased by about 50% to €2.2 billion since before the war started.
This year, the company, with around 9,000 employees, aims to generate at least €2.5 billion and reach €6 billion by 2030. Hensoldt's radars are used by Ukraine to protect its civilians from Russian airstrikes and are also installed in the Eurofighter combat jet.
The German government holds a blocking minority of just over 25% in the company, which was once part of Airbus. Over the past three years, Hensoldt has invested €1 billion, including in a new optronics site in Oberkochen in nearby Baden-Wuerttemburg. The technology allows for advanced capabilities in tracking and detection. Hensoldt also manufactures periscopes for armoured vehicles and submarine optics.
Submarines: Thyssenkrupp Marine Systems (TKMS)
The Kiel-based subsidiary of the Thyssenkrupp industrial group claims to be the world leader in non-nuclear submarines and is fully booked until the early 2040s. In December, the Bundestag or German parliament's budget committee approved the construction of four additional 212CD-class submarines for the German Navy, bringing the total to 10: Six for Germany and four for Norway.
Recently, TKMS also received an €800 million contract from the German government to modernize six Navy submarines. The company says it now has €18 billion on its order books.
The shipyard is also bidding to build submarines for Canada. The defence company, with a total of 8,500 employees, operates its main shipyard in Kiel and a shipyard in Wismar, in the north-eastern German state of Mecklenburg Vorpommern, which it bought in 2022.
Anti-tank weapons: Dynamit Nobel Defence (DND)
DND remains largely out of the public eye, but it is the company that provided Ukraine with 16,917 "Matador" anti-tank weapons by April of this year – funded by the German government. DND is part of the Israeli defence group Rafael.
The Ukraine war has been a significant growth driver for the company, which employs over 300 people. In a mandatory disclosure in March 2023, DND reported that its revenue in 2022 – the year the war began – was approximately €140 million or more than double the €58 million recorded in 2021.
Assorted firearms: Heckler & Koch
Less than a decade ago, Heckler & Koch was deeply in debt and struggling financially, with employees even agreeing to unpaid overtime. Those days are long gone, as the profitable arms manufacturer is now posting record highs, with significant investments being made at its headquarters in Oberndorf in the Black Forest, including a new shooting centre.
And investments are set to increase in the coming years. The company supplies not only the German armed forces but also the Baltic states and Norway – all neighbours of Russia. Since early 2022, the workforce has grown by over 20% to around 1,300 employees.
Cruise missiles: MBDA Germany
The German subsidiary of the European defence group MBDA is also experiencing strong growth. Before the Ukraine war, it employed around 1,100 people; now, the workforce has grown by about 300, with plans to exceed 1,700 by the end of this year.
MBDA is investing in a new production facility in Bavaria to manufacture missiles for the US Patriot air defence system. The company has received contracts for the German armed forces and NATO partners. It also produces missiles for the Eurofighter and recently secured a major order from them. Additionally, the company manufactures Taurus cruise missiles – a weapon Ukranian President Volodymyr Zelensky has been asking Germany to send it for years.
Drones: Helsing and Quantum-Systems
Drone manufacturers are in high demand, both among investors and in the defence sector, with significant growth potential predicted. Munich-based defence company Helsing, which produces the HX-2 kamikaze drone, used by Ukraine and currently being tested by the German armed forces, recently raised €600 million from investors.
The company has also unveiled an underwater system and artificial intelligence designed to guide fighter jets in complex air combat scenarios. Meanwhile, Quantum Systems, based in Gilching, Bavaria, manufactures surveillance drones.
- Germany
- Arms
- Wars
Source: www.dailyfinland.fi
