100 billion for the Bundeswehr - head of the Munich tank manufacturer KMW promises: "We can deliver"

Created: 03/13/2022, 20:50

By: Thomas Schmidtutz

120 Leopard 2 Bundeswehr tanks urgently need to be upgraded.

© Philipp Schulze/dpa

In view of the Ukraine war, Olaf Scholz wants to make the Bundeswehr fit with a 100 billion package.

KMW boss Ralf Ketzel explains what the Munich tank manufacturer KMW can contribute and where there are still problems.

Munich - For the Munich armaments group Krauss-Maffei Wegmann (KMW) it was an up and down of emotions: just four weeks ago there was a big question mark behind a four billion euro order for the Puma infantry fighting vehicle.

Chancellor Olaf Scholz now wants to invest 100 billion euros in modernizing the Bundeswehr.

A conversation with KMW Managing Director Ralf Ketzel about the surprising turning point in German defense policy, the overdue reform of the Federal Office for Procurement and the Franco-German MGCS armaments project.

Mr. Ketzel, a good four weeks ago, the hoped-for 3.9 billion euro order for the procurement and upgrading of the Puma infantry fighting vehicle was still in the balance.

After the Russian invasion of Ukraine, Chancellor Olaf Scholz has now turned 180 degrees and announced a 100 billion euro package for the Bundeswehr.

Did your champagne corks pop after the historic Bundestag session?

No.

The background is much too serious for that and the situation is very worrying.

We are still at a very early stage with the special fund you mentioned.

Just think of the discussion about nuclear sharing and the possible procurement of the American F-35 fighter jet.

Of course we hope that the Bundeswehr will stand by its long-term plans.

A core element of this planning is the Puma.

The Bundeswehr has been neglected for over 20 years.

Now the deficits are apparently to be reduced quickly.

What contribution can KMW make?

The plans to convert the Bundeswehr from foreign missions back to national and alliance defense have been pushed ahead in recent years.

We hope that these projects will be implemented quickly.

We are preparing for this. 

A major project of the Bundeswehr is the further procurement and upgrading of the Puma infantry fighting vehicle.

Can you possibly deliver faster?

We can do that.

However, this presupposes that all of us - politicians, the Bundeswehr and our company - have planning security.

We have already submitted corresponding proposals.

The same applies to the Leopard 2 main battle tank and the Boxer wheeled tank.

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Originally, the Puma project was supposed to be completed by 2028.

How much faster could you deliver?

If our suppliers, for their part, are able to provide the material more quickly, we at Puma can shorten the delivery of the systems by one to two years.

What about the planned upgrade of the Leopard II to the current version?

According to the current status, we could increase the upgrade of the Leopard 2 from the current four to six vehicles per month to five to seven.

Krauss-Maffei Wegmann boss Ketzel: "Offer over 20 billion euros"

Now the planned amount of 100 billion euros is an unprecedented magnitude.

What proportion of this could be attributed to KMW?

At the request of the Ministry of Defence, we submitted a list of possible projects with a volume of up to 20 billion euros.

Our proposal includes the Puma, the upgrade of the Leopard II, the RCH 155 artillery system, as well as a system for combating armored vehicles based on the Boxer with the turret from the existing Puma offer.

These are programs that we can implement very quickly and in large numbers.

And with the Leopard II system, are we talking about new vehicles or upgrading existing tanks?

The first thing to do is to upgrade to the current status. However, I think it makes sense for the Bundeswehr to think about purchasing new systems, if only because of the costs, instead of upgrading existing systems.

Rheinmetall boss Armin Papperger has already promised additional shifts if there are new orders.

Could you?

We can react at short notice.

We have proven this time and again in the past, for example with the order from the Canadian armed forces to supply Leopard II tanks for use in Afghanistan.

We implemented the conversion in a very short time.  

You currently employ more than 1,600 people at the Munich plant.

Would you need additional personnel if the federal government were to insist on the rapid delivery of new weapon systems?

The number of our employees has been increasing continuously for years.

If there is a significant increase in order volume, we will of course have to adjust our planning accordingly.  

Krauss-Maffei-Wegmann boss Ketzel: "Put special requests on hold" if things need to be done quickly

In recent years there have been repeated, sometimes blatant, price increases for procurement projects.

Observers also attribute this to complex procurement processes.

What needs to happen to make things faster and easier in the future?

If we now provide material for short-term stabilization of the Bundeswehr, this should be based on existing permits and clearances.

Special requests must be deferred.

Anything beyond that requires additional qualifications, approvals, testing and approvals that lengthen the entire process.

That's why the motto has to be: Keep it simple, but not stupid.

In the long term, it is advisable to think about adapting the existing framework conditions.

For example?

Take the subject of spare parts.

Framework agreements on standard terms would be significantly more efficient.

On the part of the procurement office, however, there are often reservations.

In addition, it is certainly helpful in the long term to bundle and standardize procurement ideas across national borders, as is also being implemented very successfully, for example, in the cooperation between the German armed forces and the Netherlands.

So more transnational projects?

Yes.

The Boxer wheeled vehicle is a good example.

We have the same driving module in Germany, Great Britain, Lithuania and the Netherlands and therefore the same logistics.

That's a big advantage.

KMW boss Ketzel: significantly simplify procurement

Let's assume you had three wishes for the modernization of the procurement system in Koblenz: What would be the most urgent?

It's such a thing with the fairy and the wishes.

The following would certainly be helpful: Firstly, components that have already been introduced and are working should not be requalified every time they are installed in a new system.

We don't have to redevelop everything every time.

This not only applies to the material itself, but also to contractual key data.

Secondly, we need more openness for closer international cooperation on armaments issues.

This means?

Smaller nations in particular often want to procure German equipment.

However, questions such as legal certainty, political backing or liability issues regularly arise.

Many potential clients wish that there would be a kind of government protective shield for them, similar to a Hermes guarantee from the federal government.

And thirdly, I would like the procurement office to have a clear idea of ​​what you need and what you want.

Actually, one would assume that the Bundeswehr knows what it needs?

There are certainly examples in which clarity prevails in the early planning stage. Unfortunately, this is the exception.

The rule is rather that the requirements change several times already in the planning phase.

Getting away from that would greatly simplify and speed up procurement.

In order to noticeably speed up the processes in the short term, Rheinmetall has also called for a waiver of euro-wide tenders.

What do you make of it?

That may be true in the area of ​​national spare parts supply, but I see no need for a system procurement.

The European armaments industry has shrunk in recent years.

So what we need at the moment is more meaningfully structured European cooperation.

The signal to exclude European competition would not be really helpful.

KMW boss Ketzel: Accelerate German-French tank project MGCS

You are already working with your French partner Nexter on the successor to the Leopard 2 and the French tank Leclerc.

The composite system of tanks, combat drones or laser weapons called MGCS is to be put into service in 2035.

What does the latest development mean for this project?

In his groundbreaking speech, Federal Chancellor Olaf Scholz made it clear that the MGCS is one of the lighthouse projects for closer European cooperation.

A whole series of questions arise from this.

Namely?

A central question is certainly whether we can wait until 2035 or 2040 for such a lightweight project.

It would also be desirable if we were to answer questions about the MGCS at a much less ambitious level.

So more speed and clarity in the MGCS?

In any case, it would be very helpful to quickly have a clear vision on the table for the MGCS.