German arms giant Rheinmetall is opening the country’s largest ammunition factory, which will also rank as the second-largest in Europe.

Rheinmetall has emerged as the biggest winner of the massive rearmament program launched by the federal government in 2022 and now being intensified on an unprecedented scale.

The company’s revenue rose from €6.4 billion in 2022 to €9.8 billion in 2024, according to CEO Armin Papperger, and could reach €40–50 billion by 2030. This trajectory would place Rheinmetall in the top tier of global defense manufacturers. By comparison, the world’s two largest defense companies, Lockheed Martin and RTX, generated defense revenues of about $61 billion and $41 billion respectively in 2023.

Earlier this month, Papperger declared that “Rheinmetall is on its way to becoming a global defense champion.” Under his leadership, the Düsseldorf-based arms manufacturer has seen a steady increase in order volume, which now stands at a record €63 billion.

The company’s civilian business, however, is struggling. Rheinmetall once maintained an automotive supply division to balance fluctuations in its defense operations. Some facilities previously used for civilian purposes have now been converted to military production, while non-military plants unsuitable for arms manufacturing are being considered for sale.

New plant to produce components for Leopard 2

The new facility in Unterlüß, Lower Saxony, officially opening on August 27, will be Rheinmetall’s largest site, employing around 3,200 people.

The group currently operates 174 plants in more than 30 countries with about 40,000 employees, a figure expected to rise to roughly 70,000 within the next two to three years.

At Unterlüß, Rheinmetall produces a wide range of munitions as well as key components for the Leopard 2 main battle tank, the Panzerhaubitze 2000 self-propelled howitzer, and the Puma infantry fighting vehicle. The site is also involved in developing the new Panther KF51 main battle tank, seen as the potential successor to the Leopard 2.

By the end of this year, the new factory is expected to produce tens of thousands of NATO-standard 155mm artillery shells. By 2027, annual output will reach about 350,000 shells—five times Rheinmetall’s total production in 2022, which stood at 70,000.

Unterlüß will be Rheinmetall’s second-largest ammunition plant. The largest, Rheinmetall Expal Munitions in Spain, can produce up to 450,000 shells annually. Supported by additional plants in Italy, South Africa, and the United States, the company aims to manufacture 1.5 million 155mm shells per year by 2027.

Expanding across Europe

To meet this goal, Rheinmetall is building new factories not only in Germany but also in other European countries.

Facilities in Hungary and Lithuania are scheduled to begin production in 2026. In addition, the company has announced over €1 billion in investments for new plants in Ukraine and Bulgaria, including Europe’s largest gunpowder factory.

Commenting on the scale of the munitions business, Papperger pointed out that NATO members are required to maintain a 30-day wartime ammunition reserve: “For just 30 days, we need about 300 rounds per weapon per day. With 5,000 weapons, that amounts to 45 million artillery shells.”

Beyond ammunition, Rheinmetall and the entire defense sector expect a significant rise in demand across European NATO countries following the alliance’s decision to dedicate 5% of output to defense. The steepest increase is anticipated in Germany, where large-scale rearmament is being financed by new debt. Papperger foresees an order potential of up to €300 billion by 2030.

Massive Bundeswehr budget whets industry appetite

The German government’s plans to substantially increase the military budget are already well known.

The Bundeswehr’s budget for this year has risen by about 20% to €62.4 billion, with an additional €24 billion from a special investment fund.

Plans for 2026 envisage €82.7 billion in spending, plus €25.5 billion from the “special fund.” In 2027, the last year in which the fund can be used, the budget is projected at €93.4 billion, rising to about €136.5 billion in 2028 and €152.8 billion in 2029. These figures exclude military infrastructure expenditures, expected to reach around €70 billion by 2029.

According to the current federal financial plan, total government spending will exceed €572 billion by 2029, with defense accounting for 26.7%. To finance this, net borrowing is expected to climb to €126.9 billion in 2029—more than 50% higher than in 2025.

Nevertheless, Finance Minister Lars Klingbeil has acknowledged major funding gaps: €34 billion in 2027, €64 billion in 2028, and €74 billion in 2029.

CDU-SPD push welfare cuts to fund militarization

In Berlin, debates are intensifying over dramatic social spending cuts needed to fund unprecedented rearmament.

Last weekend, Chancellor Friedrich Merz argued that “the welfare state as we know it today is no longer financially sustainable” and that sharp cuts—framed as “reforms”—are unavoidable. He added: “Talk of social cuts and sharp reductions does not bother me.”

CDU General Secretary Carsten Linnemann also called for a “paradigm shift,” claiming the welfare state had become unaffordable.

Within the governing coalition, there is widespread discussion of a coming “reform autumn.” SPD federal chairman and Vice Chancellor Lars Klingbeil has not fundamentally challenged the premise, insisting instead that the government must “address social security systems.” He stressed, however, that savings should not come only from welfare spending, calling for higher contributions from the wealthiest individuals.

State pressure grows against anti-war movements

While preparing “social cuts,” the federal government is also tightening pressure on those opposing billions in rearmament.

In Cologne, activists running an anti-war campaign under the slogan “Disarm Rheinmetall; against arms exports, militarization, and war” were forced to defend their right to assembly and protest after authorities sought to ban their camp.

Officials argued that the activists’ slogan “War against war” implied “combating militarization with militant methods.” The ban was eventually overturned by the Higher Administrative Court of North Rhine-Westphalia in Münster.

“War against War” is the title of a 1919 poem by writer and anti-war activist Kurt Tucholsky, who described the horrors of trench warfare (“blood, crushed bones, and filth”) and lamented the absence of resistance (“no one dares to rebel”). He concluded with a warning: “This cannot go on, and it must not go on. We have all seen where such madness leads.”