Rheinmetall: Why the arms company is relying even more heavily on Vienna

Rheinmetall CEO Armin Papperger If you pay a factory visit, there’s a lot going on. Security clearings, the Cobra special unit is deployed, the plant in Vienna-Liesing is under police guard. Even a very small demonstration made it to the factory: “Buses instead of tanks” is written on a banner.

The reason for the contingent is the distinguished visit from the CEO, Federal Chancellor, Economics Minister and the designated Army Chief of General Staff Harald Vodosek: The location of the Rheinmetall MAN Military Vehicles GmbH (RMMV) With 1,500 employees, it is the largest production plant for military logistics vehicles in Europe. Around 15 vehicles roll out of this production facility for military trucks every day, currently 3,000 to 3,500 per year. In recent years, 50 million euros have been invested, and we are now expanding further. The number of employees is expected to grow to at least 1,700, and depending on demand, up to 4,500 vehicles could be produced per year. Nevertheless, a factory like this remains more of a factory than series production: “Every vehicle is different and has different requirements. It’s handcrafted,” explains Papperger. In addition to Germany and Austria, the more than 50 customer countries include Great Britain, Australia, Norway, Sweden and Singapore.

Papers, there best-known German armaments CEOis full of praise for the plant in Vienna-Liesing, which has been producing for 120 years (then Gräf & Stift Automobilfabrik). “1.5 billion euros “We are currently implementing this here, we will soon increase it to two billion euros,” he says confidently. He attests that the plant has “a great future, we are on the verge of major orders,” said the CEO in front of the assembled workforce. What he finds here at the Vienna location: “Know-how and specialists who can do it”. Papperger does not agree with the location lamentation, lower energy prices would of course be good, but that is not decisive.

Strong growth

The fact that the arms industry is currently experiencing strong growth and increased demand is noticeable everywhere. There is a positive mood for optimism. You look for employees, you expand. Defense is the magic word of the European economy. Also Federal Chancellor Christian Stocker emphasizes the importance of Europe’s defense capability. “Security has become a crucial question. Europe and Austria must take greater care of themselves again. A Europe that cannot provide for itself and that no longer produces itself will lose out.”

What is important to the Chancellor is not just that more money for… defense is spent, but also where this money Value creation creates. “This contributes to the country’s defense capability and at the same time creates added value and employment.” Papperger emphasizes: “We pass on 600 to 700 million euros in orders to the Austrian economy here at this location.”

Focus on “Defense”

More money for rearmament and defense in Europe: The EU-27 will have 300 billion euros in 2024 spent on it. In 2025 it would be around 400 billion. Papperger’s Rheinmetall therefore focuses its business areas purely on the armaments sector – and sold the automotive division completely. A shift in corporate management that is also viewed critically. In the interview, the CEO says: “As an entrepreneur, you have to make clear decisions. The automotive sector in Europe is no longer expanding, but is declining. This will not come back in the next 15 years.” On the other hand, you have security goods that are growing at 30, 40 percent per year. Capital is finite and we have to invest where we can grow. That’s why the clear focus on defense,” says Papperger.