Rheinmetall’s Imperial Ambitions: The German Arms Giant Rousing French Suspicion

How a 2022 Phone Call Transformed Rheinmetall into Europe’s Arms Powerhouse

When Germany’s defence minister called Armin Papperger on 27 February 2022, three days after Russia invaded Ukraine, the Rheinmetall CEO was ready. Asked how much weaponry he could quickly supply, Papperger immediately named a figure: €42 billion. The same morning, Chancellor Olaf Scholz had announced a €100 billion off‑budget fund to rebuild the Bundeswehr. That call catapulted the Düsseldorf‑based company from a mid‑tier industrial player into the undisputed champion of Europe’s sudden rearmament.

Rheinmetall has since captured roughly 40% of that historic German fund. Over five years, its sales jumped 75% to nearly €10 billion, net profit multiplied 2.5‑fold, and the order book reached a record €63.8 billion by end‑2025. Papperger, who took the helm in 2013 when the firm still drew half its revenue from civilian automotive parts, now promises revenues of €40‑50 billion by 2030—placing Rheinmetall alongside giants like Lockheed Martin and Northrop Grumman.

To fuel that ambition, the group has built Europe’s largest ammunition factory (capable of 1.5 million 155‑mm shells a year), bought Spanish munitions specialist Expal Systems for €1.2 billion, taken over German naval yard Lürssen, Croatian demining‑robot maker Dok‑Ing, and struck partnerships with BAE Systems, Leonardo, Ukrainian Defence Industry and Finnish satellite firm Iceye. Papperger has even persuaded Berlin to pay about 30% above normal prices for some equipment, one observer says, to help him offer cut‑price deals when competing abroad.

Yet the breakneck expansion is rousing fierce pushback. The Franco‑German Main Ground Combat System (MGCS) tank project is paralysed, French authorities accuse Rheinmetall of deliberately wrecking it to dominate the programme and crush rival KNDS. Paris calls the company a ‘Trojan horse’ for American defence interests, citing alliances with Anduril, Lockheed Martin and Vantor. And this summer, Berlin itself delivered a stinging snub: it chose rival TKMS for four new frigates without even calling Papperger—the first time the government has openly rebuffed its own champion.

Inside Papperger’s Empire: Consolidation, Deadlock and a ‘Trojan Horse’

The Pharaonic Build‑Up

Rheinmetall’s metamorphosis is rooted in perfect timing. Scholz’s Zeitenwende—the ‘epochal turning point’—flooded the company with state cash just as Papperger was already pivoting out of auto parts. He sold non‑core units and turned carburettor plants into arms factories at breakneck speed. The sheer scale of the order book, €63.8 billion, gives the firm multi‑year revenue visibility and a licence to invest ahead of demand. Yet this hyper‑growth also carries execution risk: the €600 million munitions plant alone demands flawless ramp‑up, and integrating Lürssen, Expal and multiple startups in parallel is a managerial stress test.

Why the MGCS Programme Lies in Ruins

The joint tank intended to embody Franco‑German defence cooperation has been stranded since 2023. According to internal notes seen by the French procurement agency (DGA), Rheinmetall’s entry into the project—orchestrated by Berlin in 2019—upset a delicate balance. Papperger refused a balanced governance structure and insisted on leadership. “He deliberately poisoned the dossier while weakening his rival KNDS and presenting his own solo programme,” a former DGA official tells the French press. The resulting deadlock has all but killed the MGCS, and the recent June accord between Paris and Berlin to prepare KNDS for an IPO is expressly designed to shield it from Rheinmetall’s predatory moves.

France Sees a ‘Trojan Horse’ for the US Industry

The French accusation is blunt. Jean‑Louis Thiériot, a conservative lawmaker leading a parliamentary mission on land armaments, calls Rheinmetall “the Trojan horse of the American defence industry in Europe—it cares nothing for European sovereignty, only for financial logic.” The evidence: a flurry of trans‑Atlantic ventures, including drone and missile co‑production with Anduril, a geospatial joint venture with Vantor, and a Lockheed Martin deal to build F‑35 fuselages, Patriot missiles and ATACMS in Germany. While Berlin sees such moves as insurance against US delivery bans, Paris fears they will lock Europe deeper into US supply chains and undermine homegrown projects.

Even Berlin Begins to Push Back

For years, Papperger’s lobbying was invincible. He brought former economy minister Sigmar Gabriel onto his board in spring 2025 and cultivated the Bundestag where arms spending must be approved. But the mood is shifting. Germany’s powerful competition authority recently warned in a report about concentration risks in defence. And when Papperger jumped the gun in May by pre‑announcing a huge frigate deal, Defence Minister Boris Pistorius quietly chose TKMS’s cheaper offer instead—without informing Rheinmetall. It is the clearest signal yet that Berlin will not tolerate a monopoly, no matter how cherished the champion.

What Rheinmetall’s Trajectory Means for Europe’s Defence Sector

• Rheinmetall’s €63.8 billion order book and stated target of €40‑50 billion in sales by 2030 create a powerful revenue narrative, but competitors should note that Berlin’s recent frigate snub proves political capital is finite; the German competition authority’s concentration warning may foretell more blocks on future deals.
• For KNDS and other European rivals, the IPO plan unveiled in June is a direct defensive move—investors should track whether that listing proceeds, as it would permanently insulate the Franco‑German tank champion from a Rheinmetall takeover.
• Policy‑makers pushing European defence sovereignty must grapple with the Lockheed Martin and Anduril partnerships: they embed US‑controlled technology into the German industrial base, potentially eroding the business case for purely European platforms like the MGCS.
• Rheinmetall’s own management needs to repair its reputation after Papperger’s derogatory remark about Ukrainian drone makers and reports of a Russian assassination plot; attracting talent and winning multi‑national contracts in sensitive markets will require more restrained communication.
• The deadlocked MGCS programme should be treated as a case study in governance failures: any future Franco‑German industrial joint venture will require watertight shareholding and voting rules from day one, or risk the same paralysis.