Rheinmetall strengthens US market presence with acquisition of Loc Performance

In a strategic move to strengthen its presence in the US market, Rheinmetall has officially acquired Michigan-based Loc Performance for nearly $1 billion. 

Rheinmetall has completed its acquisition of Michigan-based Loc Performance for nearly $1 billion, a strategic move aimed at expanding its presence in the US market, Caliber.Az reports, citing foreign media.

“The purpose of the acquisition is to strengthen Rheinmetall’s position in the US market, and we do that in many ways,” said Matthew Warnick, managing director of American Rheinmetall Vehicles, in an interview ahead of the deal’s closure. “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.”

With the $950 million purchase finalized, Rheinmetall plans to retain those 1,000 employees and potentially add more jobs. Loc CEO Jason Atkinson noted that before the acquisition, the company already had a backlog of around $3.6 billion in work, including vehicle drivelines, suspensions, track systems, rubber products, armor products, and fabricated structures.

Rheinmetall, based in Germany, has been focusing on increasing its share of the US market, aiming to win major Army contracts such as the Bradley replacement program (XM30), the Common Tactical Truck, the Small Multipurpose Equipment Transport (S-MET) Increment II, and a revamped self-propelled howitzer project. Warnick predicts that the partnership will generate nearly $850 million in revenue in 2025, with the potential to exceed $1 billion by 2027, depending on the outcome of new contract wins.

"[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, be it in the United Kingdom, be it in Australia, be it in Germany, but also winning new contracts as we go forward," Warnick added.

Warnick also mentioned that the growth of the US market will influence plans to expand production capabilities and possibly establish a military vehicle center of excellence within the United States.

By Naila Huseynova