Armaments industry | Hensoldt, Rheinmetall & Co: Doing business with authoritarian regimes

The discussion surrounding a possible ceasefire in Ukraine has one loser: Shares in the defense company Rheinmetall have lost several percent in recent days. CEO Armin Papperger should be able to cope with this – since the "turning point" of 2022, the value of the shares has been rising sharply . The company held its annual general meeting on Tuesday. Four organizations – "Action Outcry – Stop the Arms Trade!", the umbrella organization Critical Shareholders , Facing Finance, and Ohne Rüstung Leben – used the opportunity to sharply criticize Rheinmetall and other German defense companies.

Despite billions of dollars in orders from Germany and other NATO countries, Rheinmetall is pursuing an "aggressive internationalization strategy," according to a statement from the group . The goal is to break away from German export regulations.

In her speech at the Annual General Meeting, Barbara Happe, chairwoman of the Association of Critical Shareholders, denounced Rheinmetall's participation in the South African joint venture Rheinmetall Denel Munition. Through this venture, the company supplies weapons to countries such as the United Arab Emirates and Saudi Arabia. Rheinmetall is also expanding its presence in Hungary and the USA, ignoring political developments in these countries. "Rheinmetall is developing into a global arms producer without borders – ready to meet demand wherever the price is right," Happe said. This also applies to the Düsseldorf-based company's involvement in the production of American F-35A stealth bombers. "Rheinmetall is thus participating in the construction of an aircraft intended for the deployment of weapons of mass destruction, increasing the risk of nuclear escalation in Europe."

"Papperger continues to try to present himself as a security guarantor par excellence."

Barbara Happe, Chair of the Umbrella Association of Critical Shareholders

In an interview with "nd," Happe explains: "Papperger is trying to present himself as a security guarantor par excellence." She says she cannot detect any awareness of the problem of production in countries with right-wing populist governments.

The anti-militarist alliance "Disarm Rheinmetall" accuses the CEO of playing on fear. "He is predicting a Russian attack on NATO states and the Federal Republic of Germany," writes "Disarm Rheinmetall" on the short message service Bluesky. Papperger has said that the Bundeswehr must be ready to repel such an attack by 2029.

The Annual General Meeting was held virtually "to prevent disruptions by third parties," as Supervisory Board member Ulrich Grillo stated, according to "Rheinmetall Entwarmnen." Groups from the peace movement therefore demonstrated in front of the defense company's headquarters in Düsseldorf during the Annual General Meeting. The alliance "No Peace with Rheinmetall" had already called for a "pre-eve demonstration" against the Annual General Meeting on Monday.

With revenues of just under ten billion euros, Rheinmetall was Germany's largest defense company in 2024. The Hensoldt Group, which manufactures sensors, optical devices, and radar systems, is also among the industry's top 10. The four-party alliance also plans to voice its criticism at its annual general meeting on May 27. "Despite booming orders from Germany and Europe, the defense company Hensoldt is also continuing its business with authoritarian regimes," a press release states. The Middle East remains the company's second-largest sales region.

Daimler Truck is less well known as an arms manufacturer. The company produces, among other things, military commercial vehicles. At its annual general meeting on May 27, the umbrella organization of critical shareholders also plans to draw attention to its dealings with autocrats. In 2023, Daimler Truck delivered military vehicles to Algeria, Saudi Arabia, and Turkey. In Algeria, the vehicles are being used specifically to persecute refugees and seal off the borders.

The German arms industry, with its business dealings with authoritarian regimes, demonstrates that it is not concerned with security, according to the four anti-militarist organizations. However, perhaps this simply means security—namely, the security of its own profits.