According to German media, one of the “winners” of the war in Ukraine is the German arms industry Rheinmetall based in Dusseldorf, North Rhine-Westphalia, maker of state-of-the-art armored fighting tanks such as the Leopard 2. It is an arms industry that plays a key role in arms shipments to Ukraine, after approval by the German parliament, and is making historic gains.

Now Rheinmetall is turning, according to a report in the economic newspaper Handelsblatt, to the highly competitive American market and is proceeding with the acquisition of the defense industry Loc Performance (or just Loc) based in Michigan for $950 million. Its aim is to enter the market for equipment systems in the USA and indirectly to strengthen the relations between Germany and the USA in the field of the defense industry.

What attracted Rheinmetall’s interest?

In its announcement, Rheinmetall states that “by acquiring Loc, it expands its activities in cooperation with the US military, expands its industrial production base in the US and creates new avenues for the market of the technologies it develops in North America.”

Loc employs approximately 1,000 workers at four plants in Michigan and currently manufactures primarily military vehicles and personnel carriers, with potential for further development of its production model.

Rheinmetall’s interest, according to the German newspaper, seems to be mainly the XM30 pilot program, which aims to build a new generation of personnel transport vehicles, but also participation in the American Common Tactical Truck equipment program, which concerns the construction of 40,000 military trucks.

Greater state participation in armaments

The timing of the announcement of this acquisition is also of interest. According to Handelsblatt revelations last week, the German Minister of Defense Boris Pistorius together with the Minister of Economy and Energy Robert Habeck are preparing a bill, which provides for greater and easier participation of the German state in the boards of directors of German defense industries.

A move, which is considered of strategic importance, in the context of the armoring of the German armed forces in the long term but also because the Russian threat is assessed by the German government as a systemic risk that concerns security in Europe as a whole.

It is worth noting that not long ago Russian plans were revealed to assassinate the main CEO of Rheinmetall in Dusseldorf, due to its direct connection to the war in Ukraine and German military assistance.