Rheinmetall and Hesse announce 270 million euro defense expansion in Kassel and Calden

Expansion plans in northern Hesse

Rheinmetall and the state government of Hesse have agreed to expand defense manufacturing and testing infrastructure across northern Hesse with total investments of 270 million euros. Rheinmetall chief executive Armin Papperger and Hesse Minister-President Boris Rhein signed a letter of intent on 27 August 2026 at Kassel Airport in Calden. Under the agreement, Rheinmetall is committing more than 260 million euros to its Kassel production plant and airport facilities, supported by 25 million euros in state funding. The planned infrastructure at the Calden site includes a logistics and technology center spanning more than 30,000 square meters, scheduled to open by late 2027, alongside a dedicated drone testing facility. The initiative also integrates the Hessian Drone Competence Center, which received eight million euros in state backing and is operated by the Technical University of Darmstadt.

Papperger outlined the industrial objective for the expanded Kassel facility during the joint announcement.

Kassel will become the largest tank plant in Europe.

Production targets and project Arminius

The facility upgrade is structured to support annual production of up to 500 Boxer wheeled armored vehicles, which Rheinmetall manufactures in a joint venture with KNDS Deutschland. The expansion prepares the site for the German military's planned Arminius procurement program, which includes an initial order valued at 12.4 billion euros for more than 1,500 Boxer vehicles. Follow-up framework contracts ranging between 14 billion and 26 billion euros could expand the procurement to more than 5,000 vehicles, bringing potential project volume to nearly 40 billion euros and securing plant operations through 2040. Final contract details are scheduled for completion during the second week of September 2026, ahead of a 25 million euro procurement submission to the Bundestag budget committee on 9 December 2026.

Workforce growth and regional impact

The manufacturing initiative is planned to generate over 1,000 new jobs across both sites. Employment at the Kassel facility, which rose from 1,000 workers in early 2022 to 2,200 by August 2026, is projected to reach 3,000 staff by late 2028. The Calden airport facility will add between 130 and 200 jobs, bringing combined regional headcount to approximately 3,500. Company-wide, Rheinmetall plans to expand its global workforce to 70,000 employees by 2030. Hesse Economy Minister Kaweh Mansoori noted the economic rationale behind domestic military procurement during the presentation.

It is a matter of common sense that we keep the billions that must now be spent in our country.

Delivery scrutiny and quality disputes

The expansion coincides with external scrutiny regarding delivery schedules and equipment quality. German Defence Minister Boris Pistorius previously voiced criticism over production delays affecting the Bundeswehr's Heavy Weapon Carrier Infantry vehicle, alongside reported delays involving the Caracal airborne vehicle and the Kodiak combat engineering vehicle built in Kassel. Concurrently, Berlin Interior Senator Iris Spranger raised complaints before the state parliament committee regarding more than 5,200 ballistic protective vest plates delivered in 2017 that failed before their ten-year warranty expired.

Spranger addressed the ballistic failure during a parliamentary interior committee hearing.

It is an absolutely unacceptable quality defect in a product from the Rheinmetall company.