German defence group Rheinmetall is planning a major industrial expansion in northern Hesse. More than €260 million will be invested in its Kassel plant and at Kassel-Calden Airport, with the programme covering increased armoured vehicle production, a logistics and training centre and a new drone testing facility.
The plans were presented as Rheinmetall CEO Armin Papperger and Hesse’s Minister-President Boris Rhein signed a letter of intent at Kassel-Calden Airport. The state government is expected to support the investments with an amount in the tens of millions of euros.
More than 1,000 new jobs are expected to be created in Kassel and Calden over the longer term. This would make the expansion one of the largest recent defence-related industrial investments in the German state.
“Kassel will become Europe’s largest tank factory,” Papperger said at the signing ceremony.
The statement reflects Rheinmetall’s ambitions for the site. However, the pace and scale of the expansion will also depend on whether the major military orders anticipated by the group are approved.
Boxer production set to increase
The Kassel plant plays a central role in Rheinmetall’s military vehicle operations. It produces the Boxer wheeled armoured vehicle, which is used by several European armed forces and can be configured for a wide range of military tasks.
European demand for ammunition, vehicles and other defence equipment has risen sharply. Russia’s war against Ukraine, growing national defence budgets and NATO requirements for higher military expenditure are driving new investments. Germany is also carrying out an extensive modernisation of the Bundeswehr.
A key element in Rheinmetall’s plans is Germany’s Arminius procurement project. Under the programme, the Bundeswehr is considering a large order for Boxer vehicles in several configurations. The vehicles would be produced by Rheinmetall and the Franco-German defence group KNDS.
Industry reports have previously referred to a potential requirement for as many as 3,000 vehicles. No final order volume or contract value has yet been announced.
Papperger has said that an initial contract could be worth approximately €12.4 billion to Rheinmetall. Further vehicle orders and long-term service contracts could follow. If the project proceeds on the scale anticipated by the company, it could keep the Kassel plant operating at high capacity until 2040.
New logistics, training and drone facilities
The expansion is not limited to the existing vehicle factory. Rheinmetall also plans to establish a central logistics and training complex near Kassel-Calden Airport.
The logistics centre will cover more than 30,000 square metres and is scheduled to begin operating at the end of 2027. Its location close to the airport is intended to support transport, training activities and the coordination of Rheinmetall’s various military systems.
The company also wants to build a drone testing centre at the airport. Rheinmetall has expanded its activities in unmanned aircraft, surveillance technology and digitally connected military systems in recent years.
Drones now perform an increasingly important role in modern warfare. They are used for reconnaissance, target acquisition, communications, electronic warfare and direct strikes. A dedicated test area would enable Rheinmetall to develop and evaluate these systems close to its other operations in Hesse.
Rheinmetall continues rapid expansion
The investments in Kassel and Calden form part of Rheinmetall’s broader capacity expansion. The group is enlarging existing plants and constructing new facilities to meet rising demand from Germany, other NATO members and international partner countries.
Rheinmetall aims to increase its global workforce to around 70,000 employees by 2030. The planned recruitment in northern Hesse will contribute to that growth.
For the region, the project promises additional skilled employment in vehicle production, logistics, maintenance, training and drone technology. Financial support from the state government also demonstrates Hesse’s intention to strengthen its position within Germany’s rapidly expanding defence industry.
The project nevertheless remains closely linked to political decisions on future military procurement. The speed at which production can grow will therefore depend on Bundeswehr funding and the timing of the expected contracts.
Source: N-tv, Rheinmetall and the Hesse state government.
