Rheinmetall Considers Acquisition of Volkswagen’s Osnabrück Plant
Rheinmetall, a German defense company, is exploring the possibility of acquiring a soon-to-be-idled Volkswagen plant in Osnabrück, Germany. The company is seeking additional production capacity in the country, as the struggling German automakers reduce their production in the face of declining European auto sales.
Volkswagen’s Osnabrück plant is one of three facilities that will be shut down in the next two years, following the company’s December decision to halve its production capacity in the country due to the decline in European auto sales.
Rheinmetall’s CEO, Armin Papperger, stated that the Osnabrück plant would be a good fit for the company, but emphasized that a decision on the acquisition of the plant would depend on the securing of further tank orders.
Papperger also mentioned that Rheinmetall is in constant talks with Volkswagen regarding a potential cooperation in the production of military trucks.
The company also announced that it will distribute more than 350 million euros to its shareholders, following a record of orders and profits, as European countries increase their defense spending.
“A new era of rearmament in Europe has begun” Papperger said, adding that it brings the company growth prospects for the coming years, which they have never experienced before.
The manufacturer of 155-mm NATO-standard munitions is one of the biggest beneficiaries of the Ukraine war, as investors have set aside their ethical concerns about weapon stockpiles. Since the start of the war in 2022, the company’s stock price has more than quadrupled.
Transatlantic relations have taken an extraordinary turn, following US President Donald Trump’s abandonment of support for Ukraine and its European allies, leading to a new surge in military spending across the continent.
Rheinmetall will adjust its forecast as the military customers’ needs become clearer in the course of the year, the company said, adding that its order book has reached a record high of 55 billion euros.
Papperger expects the company to take in around 8,000 new employees in the next two years, increasing the global workforce to 40,000.