Rheinmetall CEO Papperger looking at divesting automotive supply division
Rheinmetall is examining divesting its long-established automotive supply division, as it no longer aligns with the company’s core business. As Armin Papperger noted at the Annual General Meeting on 13 May, the operating profit of 1.5 billion euros for 2024 is driven by the „highly dynamic development“ in the defence industry, and the civilian business of Rheinmetall cannot contribute to growth in the crisis-ridden automotive industry environment.“
Papperger, who has led the company for twelve years and whose contract runs until the end of 2029, emphasised that this was „not the fault of our employees“, who „performed admirably under difficult circumstances“ and deserve gratitude and recognition. However, it has been recognised that activities in automotive supply can no longer be part of Rheinmetall’s core business.
„Given the current geopolitical situation, Rheinmetall must focus on restoring the defence readiness of its clients, especially Germany and its allies", he said. Some parts of the civilian business, including employees and locations, will now redirect their efforts toward this mission.
„We are reviewing whether the remaining civilian business should stay within Rheinmetall“, Papperger announced. „We will do everything in our power to ensure a good future for our employees.“
Since the Russian invasion of Ukraine, Rheinmetall has become the largest ammunition manufacturer in the Western world. However, the automotive supply business, particularly through its former subsidiary Kolbenschmidt Pierburg, which became Rheinmetall Automotive, has long been a part of the company. At the end of 2023, Rheinmetall sold its small piston business – which employs 460 workers in Neckarsulm – to the Munich-based investment firm Comitans Capital AG.
Power Systems still remains
What remains is the Power Systems department, which includes the company Pierburg. The division is a system provider for high-quality and innovative (mobility) solutions, control technologies, and digital applications. It includes the e-mobility business, spare parts trade, and hydrogen technology. The division employs around 6,700 people worldwide.
Rheinmetall’s market capitalisation has doubled since February 2025, reaching 73 billion euros – more than that of Munich Re, Siemens Energy, or Merck. The shares are widely held.
Increase in rocket production
According to Bank of America, Rheinmetall is expanding its portfolio with a memorandum of understanding for a joint venture with the US defense contractor Lockheed Martin, to produce rockets and missiles in Europe. The move is expected to significantly boost revenues in the medium term.
