Rheinmetall acquires manufacturing company Loc for $950M

German defense giant Rheinmetall has acquired Michigan-based advanced manufacturing company Loc Performance Products for $950 million as its American subsidiary vies for some of the biggest U.S. Army vehicle production business available in decades.

Loc will be nested within Michigan-headquartered American Rheinmetall Vehicles, or ARV, which has a foreign ownership, control or influence mitigation agreement with the U.S., giving it clearance to operate stateside as a U.S.-based company.

In recent years, ARV has been selected to participate in two major U.S. Army competitions. It is developing a future combat vehicle to replace the Bradley — the XM30 — while also building prototypes for the service’s Common Tactical Truck competition. The winner of the XM30 competition would build around 4,000 vehicles valued at around $45 billion. The CTT program is worth a potential $16 billion to build 40,000 trucks.

“We have long, at American Rheinmetall, looked at organic growth being part of our strategy,” Stephen Hedger, the company’s CEO, told Defense News following the company’s Aug. 13 announcement. As the company moves further into the XM30 competition, for example, it will need to show it’s capable of large-scale, full-rate production, he noted.

“I would call Loc Performance one of the most credible and impressive companies in the land systems domain that you may have never heard of,” he said. “They are both an [original equipment manufacturer] and prime to the government on very important land systems programs and a direct tier-one supplier to all the traditional primes you would expect in the land systems area and growing in other significant areas.”

Loc’s potential annual sales are projected to hit between $650 million and $820 million in 2026, according to a Rheinmetall company document overviewing the acquisition.

Loc’s advanced manufacturing includes strong, large-scale welding capabilities, Hedger said. Across three facilities in Michigan and one in St. Marys, Ohio, the company has 1,000 employees and around two million square feet of manufacturing space. It builds fabricated structures like armored cabs and doors, hulls, turrets, underbelly armor and hatches. Loc also builds mechanical systems, composite rubber tracks and long-range munition missile body structures and components.

“They have a very healthy and diverse order book with a strong backlog across the defense industrial base,” Hedger said.

American Rheinmetall’s interest in Loc also extended beyond the company’s potential ability to help win future U.S. Army contracts.

“We see international opportunities to supply Rheinmetall globally,” Hedger said. “For example, where do we have huge orders that require turret structures in Europe and Australia that this company may nest into.”

Additionally, Rheinmetall has always purchased its tracks for tanks and fighting vehicles. “This gives us an opportunity to bring some of that in-house,” Hedger said.

ARV is hopeful to move through the regulatory process for its first U.S.-based acquisition by the end of the calendar year, Hedger added.