Rheinmetall’s recent acquisition of Loc Performance Products, LLC in the USA marks a significant milestone in the company’s expansion and strengthening of its position in North America. This strategic move not only enhances Rheinmetall’s core business in the field of land vehicles for military customers worldwide but also solidifies its presence in the largest defense market in the world.
The acquisition of Loc Performance Products, a renowned vehicle specialist based in Plymouth, Michigan, is a key step towards increasing Rheinmetall’s industrial base in the USA and gaining further access to technologies in North America. With a focus on high-volume major orders for U.S. Army vehicle programs, Rheinmetall aims to capitalize on the potential of over USD 60 billion in total orders. This includes participation in the XM30 program for infantry fighting vehicles and the CTT program for tactical trucks, with estimated volumes of USD 45 billion and USD 16 billion respectively.
The purchase price for Loc Performance, based on an enterprise value of USD 950 million, reflects Rheinmetall’s commitment to investing in capabilities that will drive growth and success in the US market. The acquisition brings on board a skilled workforce of around 1,000 employees, with expertise in maintenance, repair, and combat enhancement of military combat vehicles, further strengthening Rheinmetall’s internal supply chains.
Loc Performance’s diversified portfolio of drivetrains, suspensions, track systems, rubber products, armor products, and fabricated structures for vehicle platforms positions it as a key supplier to the US government and OEM for military ground vehicle track systems. The company’s manufacturing capabilities, including modernized fabrication, machining, and welding technologies, align with the critical manufacturing requirements of the XM30 and CTT programs. With a manufacturing footprint of 1.7 million square feet, Loc Performance offers significant capacity for future expansion.
Rheinmetall’s CEO, Armin Papperger, emphasizes the strategic importance of the acquisition, highlighting the company’s focus on growth in the US market. The investment in Loc Performance underscores Rheinmetall’s commitment to expanding its share of the large market volume and leveraging the company’s sustainable business model and skilled workforce for targeted orders in the USA.
American Rheinmetall Vehicles, the US-based arm of Rheinmetall, stands to benefit significantly from the acquisition of Loc Performance. With access to modern, efficient manufacturing space and increased capacity for future expansion, American Rheinmetall Vehicles is well-positioned to support key modernization programs of national significance for the Department of Defense. This includes the development and delivery of next-generation combat vehicles, tactical wheeled vehicle platforms, and advanced mission systems that enhance the effectiveness, mobility, and situational awareness of soldiers on the battlefield.
In conclusion, Rheinmetall’s acquisition of Loc Performance Products represents a strategic move to expand and strengthen its position in North America, particularly in the competitive landscape of high-volume major orders in the USA. With a focus on growth, innovation, and customer satisfaction, Rheinmetall is poised to make significant strides in the US defense market, supported by the expertise and capabilities of Loc Performance and American Rheinmetall Vehicles.