Q: Peter, the UK and Rheinmetall are words that seldom appear in the same sentence. Could you perhaps bring readers up to date with Rheinmetall’s UK footprint, and explain why we might be seeing those words appearing together a little more often in the future?
A: Yes Shaun, I’d be happy to. A brief overview of the overall Rheinmetall corporate structure would be the best place to start with that. Rheinmetall A.G. had a turnover of €5.6 billion last year, split pretty much 50/50 between the automotive and defence businesses. As a quick aside before we focus on defence, Rheinmetall’s automotive business has a small, but successful, UK footprint with Mechadyne International in Oxford. But to focus on defence, Rheinmetall’s defence business is organised into three distinct divisions: Vehicle Systems, Weapons and Munitions and Electronic Solutions. All three have a UK footprint. Electronic Solutions has a subsidiary company on the Isle of Wight, while a separate business unit (Technical Publications) has been established in the UK for over a decade. Weapons and Munitions Division supply munitions to the MoD and pyrotechnics to UK law enforcement. Vehicle Systems, although the most recent arrival, has the largest UK presence, primarily through Rheinmetall MAN Military Vehicles (RMMV) UK, supplier to the UK MoD of over 7500 trucks. Also part of Vehicle Systems is Rheinmetall Defence UK, of which I am MD. At the moment, Rheinmetall Defence UK is primarily focused on armoured vehicle opportunities.
Q: And on the subject of armoured vehicle opportunities, perhaps we could start with Rheinmetall’s down-selection for the Challenger 2 Life Extension Programme (CR2 LEP) Assessment Phase (AP), and specifically what Rheinmetall might be able to bring to the table to effectively counter any perceived advantage that BAE Systems might have as Challenger 2’s OEM?
A: As you know, Rheinmetall were one of two (from five I believe) down-selected to receive CR2 LEP Assessment Phase contracts in late 2016; the contract was awarded in late December. The Rheinmetall project team is an integrated UK-German team, with over 35 people working full-time on this project. Perhaps the single most important thing Rheinmetall brings to the table is the company’s deep understanding of all things main battle tank (MBT). Or perhaps more simply put, between 1983 and 2002 BAE Systems delivered 819 Challenger 2 and its predecessor Challenger 1 MBTs to three users (UK, Jordan (ex-UK) and Oman). By comparison, since 1978 the consortium of Rheinmetall and Krauss-Maffei Wegmann (KMW) has manufactured more than 2000 Leopard 2 MBTs which have been supplied to some 18 different countries. The Leopard 2 remains in production to this day, and for a number of years we have been involved in upgrading/refurbishing Leopard 2’s for an ever-increasing number of users worldwide. That is business that is certain to continue well into the next decade. Additionally, as part of our CR2 LEP proposal, Rheinmetall has advised the UK MoD that as part of any award it would be prepared to take on design authority responsibility for the entire CR2 package, reducing any perceived risk and organisational complexity.
Q: Moving on, and no discussion involving the UK and armour would currently be complete without mention of Mechanised Infantry Vehicle (MIV) and the UK’s alleged option to procure Boxer without a competition. Can you comment on that, and maybe give us some insight in to any Boxer proposal Rheinmetall might make to the UK MoD?
A: I’d be happy to Shaun, but first let’s clarify the genealogy of the ARTEC (ARmoured TECnology) Boxer…At its simplest ARTEC (headquartered in Munich, Germany) is now the joint-venture (JV) of Rheinmetall and KMW and is responsible for the design, development, production and marketing of Boxer. Boxer is supplied to user nations via the Organisation for Joint Armament Co-Operation (OCCAR), this organisation also managing a number of other major multi-national defence projects. The Boxer project throughout its evolution has involved France, Germany, Lithuania, Netherlands and the UK. Currently Germany, Lithuania and Netherlands have the vehicle in-service or on order, and yes, based on their previous involvement in the programme, a sole source selection of Boxer could be a low risk option for the MoD to fulfil its MIV requirement.
Q: Do I think they will exercise that option?
A: We are preparing for a competition, but to be honest, I am confident that a sole-source procurement would, in addition to expediting delivery schedules, save the UK MoD (ultimately the taxpayer) a lot of time and money.
Q: Sole source or not, what does Boxer offer in terms of capability to the UK MoD that in your opinion its contemporaries may not?
A: In terms of capability I would argue Boxer is the most proven and capable of any possible competitor. German Boxer vehicles performed extremely well in Afghanistan, and from what we have seen with regard to requirements, we believe that the UK MIV fleet will be similar to the Dutch and German vehicles already in-service. More widely, the UK would essentially be getting a family of vehicles that benefits from a UK specified reliability growth programme alongside a range of other requirements specified by the UK during the early days of the Boxer project. More recently, the vehicle benefits from the very best of German Engineering. Boxer was designed-for-purpose and pretty much without compromise, this leading to the benefits of excellent levels of protection and growth potential which are second to none. From a reliability perspective, the Boxer prototypes were literally trialledto destruction by the Germans/Dutch over 7 years and 180,000 kms of reliability and durability trials; a British requirement and concept exploited to the full by my colleagues in Germany and the Netherlands. A lot has been written around the UK’s withdrawal from the original Boxer
(MRAV back then I believe) programme, the subsequent FRES requirement, and then on into MIV. Little of that is worth repeating here with the notable exception of the often stated ‘Boxer was too big, too heavy, and according to some, too heavily armoured.’ Well.., I think we now know the accuracy of those statements and I think it would be wrong to re-learn the lessons of the last 10 years all over again. Of particular note is the fact that Boxer’s combat weight, in APC configuration, has only increased by around 14% over the years, this being primarily attributable to the requirement for IED protection, a near non-existent threat when Boxer was first designed. Automotively, and again thanks to the British and their growth potential requirements, no significant changes have been made. At the same time, and without exception, Boxer’s contemporaries have most definitely been playing catch-up, with some increasing in weight by >30% and requiring a full suite of automotive upgrades.
Q: And should the UK select Boxer, what benefit can the UK industrial base expect? Will it not be easier/cheaper to continue building the vehicles in Germany and/or the Netherlands?
A: There are a couple of things to highlight here. Firstly, Boxer is currently in production in the Netherlands and the two German production lines in Kassel and Munich will, in the near future, be producing vehicles for the German and Lithuanian armies. This means that the supply chain is live and the components readily available with keen prices already negotiated. We would propose that the initial vehicles would be produced on the existing production lines after which Boxer would be manufactured/assembled in the UK, this approach ensures that the Initial Operating Capability is delivered quickly and allows the UK industrial base to prepare for manufacture. We would envisage that the UK activity would include the fabrication of the hull and the full assembly, test and integration functions alongside the design and development of any uniquely British variants. We are confident that we can, with minimal risk, relocate the product to the UK because this is something we have already done in the Netherlands. We have already started engaging widely with potential UK suppliers and anticipate exceeding a self-imposed UK content target of 60% (by value).
Q: Finally, if I recall correctly you spent some time in what is now DE&S leading the truck project team which included the Heavy Equipment Tractor (HET), Wheeled Tanker (WT) and Support Vehicle (SV) fleets. Are there any truck-related developments, you can tell us about, and would you have any comment on a rumoured reduction in the SV fleet of 10%?
A: Firstly, I’m delighted to see that the fleets you mentioned have performed so well and I’m proud to have been part of the team involved in their delivery. I continue to be involved in the SV fleet through Rheinmetall MAN Military Vehicles (RMMV) and anticipate absorbing the MAN military team based in Swindon into RMMV at the end of the year. I have heard the rumour of an SV fleet reduction but know nothing further. However, we are focusing on several opportunities within what we call the Logistic Vehicle Business. This includes the Strategic Support Supplier (SSS) initiative with Babcock DSG, and the Army’s Materiel Distribution Land 2025 initiative. I think that the latter is particularly exciting, with the Whole Force Approach representing real opportunities for the MOD and industry to work together to deliver improved capability and value for money. In parallel, there are several smaller truck related opportunities we are pursuing which should come to fruition over the course of the next couple of years.