Earthly ambitions are not enough for Rheinmetall’s Armin Papperger — the boss of the German arms group is setting his sights on space.
Papperger, who says the artillery and tanks specialist had “no clue” about satellites until a few years ago, is eyeing the German military’s planned €35bn in space technology spending over the next four years — part of Berlin’s drive to reduce reliance on the US.
While stressing he was “not saying” the company would win it all, he told the FT Rheinmetall was considering bidding alongside partners for three space programmes worth more than €20bn.
German MPs in December approved the company’s first satellite production contract, worth up to €2bn as part of a joint venture with Finland’s Iceye. The FT last week revealed the company was also in talks over a joint bid to build an equivalent to Elon Musk’s Starlink internet service for the German military.
Rheinmetall has been pushing into a dizzying array of technologies and geographies as Papperger seeks to turn it into a multi-domain group akin to big US defence contractors.
Revenues are forecast to have topped €10bn in 2025, more than double the level of 2021, before Russia’s full-scale invasion of Ukraine. But Papperger has much bigger ambitions and is targeting €50bn by 2030 as he positions Rheinmetall to benefit from a surge in EU defence spending and a “buy European” tilt.
On taking office last spring, German Chancellor Friedrich Merz vowed to build Europe’s strongest conventional army and unleashed unlimited borrowing to fund it.
Papperger, who estimates his company secured about €40bn of a €100bn special fund announced in 2022 for overhauling the country’s neglected armed forces, reckons he can “catch” about €300bn worth of contracts in Europe by 2030.
That would represent 15 per cent of the roughly €2tn in defence spending by EU nations over that period if they uphold their Nato commitments, according to estimates by the European Commission.
For supporters, the group’s expansion is a natural consequence of Germany’s decision to move past its era of military reticence following the second world war.
“In Rheinmetall we have a player that can handle big orders, produce at scale and stand on an equal footing with global defence companies,” said Andreas Mattfeldt, a Christian Democrat MP on the budget committee and defence spending specialist. “The scale of the expansion may seem exceptional. But these are extraordinary times.”
For others, it is a source of concern.
Moritz Schularick, head of the Kiel Institute for the World Economy and an adviser to Germany’s economy ministry on the defence industry, said: “What Rheinmetall is offering right now is a solution to the co-ordination problem the defence ministry has. They are saying, ‘don’t worry, we’ll do it all’. Clearly from a competition point of view it’s not very healthy.”
The 136-year-old company’s fortunes have ebbed and flowed through the different eras of German history.
After the first world war the cannon maker pivoted to making ploughs and typewriters when the country was ordered to demilitarise, but then became a crucial part of the Nazi war machine. During the cold war it supplied gun turrets for West German fighting vehicles. But the fall of the Berlin Wall in 1989 forced it to invest in production for the motor sector.
Now, with Germany boasting the world’s fourth-largest defence budget, Rheinmetall is preparing to sell its car division to focus on weapons and is expanding in many directions.
Last year it began making fuselages for F-35 fighter jets, branched into making in-house armed drones and announced a deal to buy its first shipyard.
At the same time, the company has been expanding geographically, using local manufacturing to build capacity and secure political support. It is producing ammunition and armoured vehicles across Europe and is also trying to break into the US market.
Benjamin Heelan, a Bank of America analyst, said Papperger had done “a really good job of expanding and diversifying” Rheinmetall, citing its joint ventures with companies from Italy’s Leonardo to US drone maker Anduril.
But the expansion has alarmed rivals big and small.
Cassi Welling, chief operating officer at German start-up Constellr, which provides thermal imaging via satellites, said: “By investing in a single player that becomes a ‘mega prime’, you start to degrade the resilience of the entire ecosystem and risk the loss of innovation”.
Mattfeldt and other MPs were irked when officials awarded a contract to Rheinmetall to develop a marine laser system without an open tender, even though a rival had a ready-to-go solution. The satellite deal was also awarded without competition.
Iceye chief executive Rafał Modrzewski, whose company will help Rheinmetall produce radar reconnaissance satellites, said there was “not any other company in Europe that can deliver such capabilities so quickly”.
But Green MP Sebastian Schäfer, another member of the budget committee, said it sometimes seemed as if Berlin was “building Rheinmetall into a European champion without being transparent about it”.
The German defence ministry said that while it did not comment on individual companies, procurement decisions were determined by the armed forces’ needs in a process that was “subject to strict regulations and close political control”.
Rheinmetall does not win everything. It recently lost a competition to build a 6×6 armoured vehicle to Finland’s Patria. But the decision prompted the heads of five German states to urge the defence ministry to reconsider — a sign of Papperger’s political clout.
Some people are irritated by the Rheinmetall boss’s confidence. The company partly suffers from “tall poppy syndrome”, according to defence industry analyst Sash Tusa, who said rivals were often jealous of its success.
Papperger, who joined Rheinmetall in 1990, became CEO in 2013 and earned €4mn in 2024 in pay and bonuses, has little time for political correctness. He refers to industry players as “big boys” and “little boys”, and has continued the company’s hunting tradition, himself killing two deer and a wild boar at the company’s annual gathering in November.
Company insiders say they are focused on their biggest challenges — capacity and speed.
Rheinmetall is establishing ammunition plants across Europe with the aim of producing 1.1mn 155mm artillery shells a year by 2027 — up from 70,000 in 2022. “The biggest challenge now is just building all the new sites,” one executive said.
Another highlighted the dramatic scale-up in production required from small suppliers of niche parts while a third admitted a planned factory in Ukraine had been delayed and a tank repair and maintenance centre in Lithuania had been “a bit slow”.
Sceptics in Germany worry Rheinmetall will be slow to deliver on its promises. An order for Skyranger anti-drone cannons has been delayed by lengthy discussions with procurement officials about the type of chassis needed.
The company is also embroiled in an ill-fated €20bn attempt to digitise the communications system of the German land forces.
Schäfer, the Green MP, said: “Rheinmetall is very good at promising things but much less consistent in producing punctually and without faults.”
Critics fear Papperger, who leads negotiations on big German contracts, runs rings around procurement officials. “For the company it doesn’t really matter if a project is delayed,” one European official said. “Once they’ve got the contract it’s incredibly unlikely it will be taken away.”
The foray into the notoriously difficult business of shipbuilding with the purchase of Naval Vessels Lürssen has unsettled insiders and analysts. Papperger has expressed willingness to take over a troubled frigate programme from Dutch shipyard Damen, but some wonder whether he is biting off more than he can chew.
He said the move was about providing new “platforms” that enable Rheinmetall to integrate its existing sensors, electronics and weapons. “We can combine the technologies,” he said. He hopes to translate cross-platform sales into higher profits, targeting an operating margin of more than 20 per cent by 2030 — versus 15 per cent in 2024.
Tusa, the defence analyst, said that while Rheinmetall made “some very big promises, I don’t think they’ll deliver on all of them”. However, he added, “what matters overall is that Europe re-arms — and for that you need companies with ambition”.
The company’s share price — up 21-fold since early 2022 — has wobbled recently, not least during US President Donald Trump’s efforts to force Kyiv into a peace deal with Moscow.
Papperger said he felt “very safe” in terms of orders until 2030 or 2032. He used last year’s dips to personally buy €2.8mn of stock. Trump’s threats to take over Greenland last month gave the shares a fresh boost.
Analysts also remain bullish. Morgan Stanley recently named Rheinmetall its top European defence pick for 2026.
For their part, German officials are relaxed about the company’s growth.
Speaking at the inauguration of a new Rheinmetall ammunition plant in Lower Saxony in August, defence minister Boris Pistorius pointed directly to Papperger and said: “We want you to be successful because your success means security for our country.”