Rheinmetall has officially acquired the Michigan-based company Loc Performance for just under $1 billion, a strategic move that company leaders assert is crucial for expanding their presence in the U.S. market.
Strengthening Market Position
“The purpose of the acquisition is to strengthen Rheinmetall’s position in the U.S. market, and we do that in many ways,” said Matthew Warnick, managing director of American Rheinmetall Vehicles, in an interview with Breaking Defense ahead of the acquisition’s closing.
“First and foremost, we pick up almost two million square feet of manufacturing space, but more importantly than that, is the… approximately 1,000 employees that we get to add to our bench that are used to manufacturing components and parts, all the way up to combat vehicles,” he added.
With the $950 million purchase of Loc now finalized, Rheinmetall intends to retain those 1,000 employees and create additional job opportunities. Loc’s Chief Executive Officer, Jason Atkinson, mentioned that before the acquisition was finalized, Loc already had about $3.6 billion worth of backlog work, including vehicle drivelines, suspensions, track systems, rubber products, armor products, and fabricated structures.
Targeting Army Competitions
Simultaneously, the German-based Rheinmetall seeks to secure a larger share of the U.S. defense market and is competing for key Army contracts, including the highly sought-after Bradley replacement program known as the XM30, the Common Tactical Truck, the Small Multipurpose Equipment Transport (S-MET) Increment II, and a reworked self-propelled howitzer initiative.
Revenue Projections and Future Growth
For 2025, Warnick anticipates that the new partnership will generate close to $850 million in revenue; depending on the outcomes of forthcoming wins, this figure could exceed $1 billion by 2027.
“[That target] is a mix of the existing backlog that we now create the opportunity for export coming out of Loc facilities, given the robust international footprint of Rheinmetall… and being able to provide material content into those programs, whether in the United Kingdom, Australia, or Germany, while also winning new contracts as we move forward,” he explained.
Warnick further noted that the extent of growth within the U.S. market will dictate the feasibility of Rheinmetall’s plans to expand its production footprint and potentially establish a military vehicle center of excellence within the United States.
