NewsRheinmetall secures record £3.1bn Bundeswehr order amid ammo shortage

Rheinmetall secures record £3.1bn Bundeswehr order amid ammo shortage

German Chancellor Olaf Scholz is observing a Rheinmetall drone at the ILA Berlin Air Show 2024.
German Chancellor Olaf Scholz is observing a Rheinmetall drone at the ILA Berlin Air Show 2024.
Images source: © Getty Images | SeanGallup
Malwina Gadawa

2 July 2024 21:27

The German defence company Rheinmetall has received a record order from the Bundeswehr to deliver military lorries. The company announced that a framework agreement has been signed, including the delivery of up to 6,500 vehicles for up to £3.1 billion.

At the end of June, the Bundeswehr ordered ammunition from the Düsseldorf-based company worth approximately £7.6 billion.

German company with a major order

According to the framework agreement, 610 vehicles worth more than £270 million have been ordered immediately, and 250 lorries will be delivered this year, reported the portal of the newspaper "Handelsblatt." The lion’s share of the contract will be financed from a special Bundeswehr fund worth £90 billion, which the German government created after the Russian invasion of Ukraine.

In the past, the Bundeswehr has repeatedly ordered military lorries from Rheinmetall. The company is also seeking an order from the Pentagon for transport vehicles for the American military.

If Rheinmetall signs a contract with the Pentagon, the order could be significantly larger than the one for the Bundeswehr. Sources close to the company suggest that the USA would order about 40,000 transport vehicles. The value of the contract is estimated at approximately £14.8 billion, reported "Handelsblatt."

Germany wants to buy ammunition for £13 billion

The Bundeswehr's warehouses lack artillery ammunition. Therefore, as reported by the weekly Der Spiegel, the German defence minister, Boris Pistorius, intends to conclude another agreement to purchase up to 2.35 million rounds of such ammunition for a record amount of £13 billion.

Initially, the Bundeswehr wanted to order only 200,000 rounds of ammunition for approximately £1.2 billion, which would be delivered by 2030. This is primarily to replenish military warehouses.

"Pistorius wants (in this way) to ensure that both arms companies will build further production capacities for the scarce 155-millimetre ammunition in Germany," it reads. Domestic production is associated with significant security considerations, emphasises the Ministry of Finance.

This is the second major ammunition transaction in recent times. A few weeks ago, the Ministry of Defence concluded a similar agreement with the defence company Rheinmetall for up to £7.6 billion to launch a new production line in Lower Saxony, reminds "Der Spiegel."

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