Rheinmetall and Lockheed Martin to Build ATACMS Missiles in Germany

Rheinmetall and Lockheed Martin signed a landmark agreement on July 7 at the NATO summit in Ankara to jointly produce ATACMS tactical missiles in Germany. The facility will be built at Rheinmetall’s Unterlüss site in Lower Saxony with support from both German and U.S. governments. This marks the first time ATACMS missiles—which have a 300-kilometer range and are used by the Bundeswehr—will be manufactured outside the United States.

What the ATACMS deal means for defense supply

The ATACMS is a ground-to-ground tactical short-range missile with a 300-kilometer range, designed for use with multiple launch rocket systems like the Mars-2 platform operated by the German military. The production and distribution center will be established at Rheinmetall’s Unterlüss location in Lower Saxony, with backing from both governments. The partnership reflects NATO’s push to strengthen European defense industrial capacity as geopolitical tensions rise.

Broader NATO missile initiatives announced in Ankara

Beyond the ATACMS deal, U.S. Undersecretary for Acquisition Michael P. Duffey announced plans to expand joint production of AMRAAM air-to-air missiles with NATO partners. NATO also agreed to establish a maintenance center in Europe for PAC-3 air defense missiles, though the host country has not yet been decided. Germany, Poland, the Netherlands, and Sweden signed a declaration of intent on the PAC-3 facility.

Stock impact: Rheinmetall and Lockheed Martin respond

Rheinmetall (RHM.DE) fell 4.75% to €1,058.80 on July 8 as broader market weakness offset the deal announcement. Meyka grades the stock B-, suggesting a neutral outlook, with a 12-month forecast of €1,544.96. Lockheed Martin (LMT) declined 1.39% to $527.96, though Meyka rates it B+ with a yearly target of $537.61. Both companies benefit from long-term defense spending commitments, but near-term profit margins remain under pressure from supply chain costs.

Why this matters for European defense independence

European NATO members have long relied on U.S. missile supply, creating bottlenecks during conflicts. Local production in Germany reduces dependency and accelerates delivery timelines. The deal signals NATO’s commitment to deterrence along its eastern flank and supports Ukraine indirectly by strengthening alliance capabilities. It also creates manufacturing jobs in Germany and establishes a precedent for deeper transatlantic defense integration.

Final Thoughts

The Rheinmetall-Lockheed Martin partnership to produce ATACMS missiles in Germany strengthens NATO’s defense industrial base and reduces supply vulnerabilities. While both stocks face near-term headwinds, the long-term defense spending cycle supports both companies’ growth trajectories.

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