Germany's Rheinmetall Eyes Volkswagen Plants for Tank Production Amid Defense Spending Surge

Rheinmetall AG, Germany's largest weapons manufacturer, is exploring the possibility of expanding its production capacity by taking over idle Volkswagen plants to produce tanks. This move comes as the company experiences a significant surge in demand due to increased defense spending in Europe. Rheinmetall's CEO, Armin Papperger, anticipates potential orders between 300 and 400 billion euros by 2030, driven by European NATO countries increasing their defense budgets to 2.5-3.5% of GDP. The company's stock has seen a dramatic rise, reaching nearly €1,300 per share from under €90 at the beginning of 2022. Rheinmetall's revenue increased by 36% last year, reflecting the boom in the defense industry since the onset of the Russian-Ukrainian conflict. Papperger also announced plans to create 8,000 new jobs, which would increase the company's global workforce to 40,000 employees. Rheinmetall is also planning to open a new 155mm plant in Unterlüß, Lower Saxony, which is set to be completed next month. This facility is expected to initially add an annual production capacity of approximately 50,000 units, increasing Rheinmetall's global total to at least 800,000 units per year by the end of 2025.