CEO Papperger’s clever but daring calculation


Rheinmetall is still looking for the first customer for its new main battle tank – and may find one in Ukraine.

(Photo: dpa)

Armin Papperger has chutzpah – without a doubt. The CEO of the Düsseldorf armaments group Rheinmetall is planning a tank factory in Ukraine – a war zone in which it is far from clear who will ultimately prevail: Ukraine and its western allies or the aggressor Russia.

So the strategy is not without risk. The intention is clear: Papperger’s aim with the new tank factory for Ukraine is to secure his long-term business.

The deal isn’t through yet: but if Ukrainian President Volodymyr Zelenskiy and Chancellor Olaf Scholz agree, the company could soon start building the plant for Rheinmetall’s most modern battle tank in the Ukraine. That would be a big step – especially for Rheinmetall.

Because the first weapon systems should be ready in two years at the earliest. Papperger’s calculus: The West will prevail in this war, and the aim is to make the Ukrainian army fit for military service again in the long term and to equip it with new systems.

Rheinmetall recognized early on what a lucrative opportunity was on the horizon: until the start of the war, Ukraine had primarily used Soviet-made weapons, ammunition and vehicles. So now the question is: who will be Ukraine’s next main outfitter?

Rheinmetall relies on Eastern Europe

Rheinmetall already calculated opportunities on the Eastern European market in last year’s annual report. Numerous NATO countries would want to modernize their Russian-made equipment there in the coming years, it says.

And Rheinmetall already showed exactly how the company intends to secure the corresponding orders. With a “home market strategy”, the armaments group wants to produce locally and involve the home market in order to become the preferred partner of the respective armed forces. When that is achieved, it is not just about new tanks, but also about other systems, ammunition, repairs, modernization and service. Rheinmetall is already following this strategy with a joint venture in Hungary for the Lynx infantry fighting vehicle, which is also new.

The possible Panther deal is even smarter. While the rest of the West seems to be concerned with emergency aid and ramping up production, Armin Papperger is threading a mega deal that promises his company big business for decades to come.

Incidentally, the Ukraine would be the first sales market for the new main battle tank, which Papperger surprisingly presented only last year. When it came to competitors, it was more likely that the next development would be a joint one. But that doesn’t stop Papperger. Chuzpe has a system with him.

More: Russia threatens to attack planned Rheinmetall plant in Ukraine

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