Rheinmetall losses deepen after German defense minister calls for Puma tank fix
By Scott Kanowsky
Investing.com -- Shares in Rheinmetall AG (ETR: RHMG ) fell towards the bottom of the pan-European Stoxx 600 on Tuesday, adding to losses from the previous session, after German defense minister Christine Lambrecht called for defective Puma tanks to be quickly fixed.
In a television interview on Monday night, Lambrecht said that "speed is now required" in the race to solve the issues with the Puma. The tank is regarded as one of the world's most well-protected armored vehicles and has been a centerpiece of Germany's preparation to lead NATO's rapid response force next year.
Germany has been planning to make 42 Pumas available for deployment at the helm of the organization's "Very High Readiness Joint Task Force" (VJTF).
However, the defense ministry said all 18 of these tanks that Germany currently owns experienced an "unexpectedly high" amount of failures during training exercises last week. Lambrecht described the problems as a "heavy setback," particularly after Berlin vowed to increase defense spending and enhance its military modernization following the outbreak of the war in Ukraine.
Lambrecht has moved to reassure Germany's NATO allies that it can still be counted on to head the VJTF. She also announced that the Bundeswehr would cease purchases of the Puma, which was developed by arms manufacturers Rheinmetall Landsysteme and Krauss-Maffei Wegmann until the issues are resolved.
Both Rheinmetall and Krauss-Maffei Wegmann are now expected to present a plan for the future of the tank, according to Lambrecht. Neither company has commented yet on the matter.
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