Metal part manufacturer joins German company for ammunitions venture

July 2012 - A powerhouse tank ammunition joint venture formed in January when a munitions manufacturer and a security technology supplier joined forces.

General Dynamics Ordnance and Tactical Systems, a company that manufactures large-, medium- and small-caliber direct and indirect-fire munitions; mortar weapon systems; components for missiles, rockets and bombs; artillery projectiles; propellants; and designs and produces warheads, and Rheinmetall Defence, a supplier of defense technology, formed a tank ammunition company named Defense Munitions International LLC, Red Lion, Pa.

The new company develops and markets new and existing 120 millimeter kinetic energy and multipurpose cartridges for the M1 Abrams and Leopard main battle tanks. The United States Army and Marine Corps as well as other NATO countries use these ammunitions, according to Laurie VanBrocklin, senior director of marketing and communications and services at General Dynamics.

“The combination of these companies will also have a positive affect on the United States metals industry who provide the key raw materials for these products,” says VanBrocklin. “It combines two of the leading tank ammunition developers and producers in the world.”     

Tank ammunition products use high-grade steel, aluminum and tungsten. Steel forgings make up the bodies of the multipurpose ammunition. Aluminum castings are used for fins, aluminum bar stock is used for sabots for kinetic energy rounds and a swaging process is used on tungsten rods to make penetrators for kinetic energy rounds used to defeat heavily armored vehicles. Most parts require some level of finish machining and assembly, she says. Because the joint venture will enable DMI to produce more products, it is likely it will require more metals than both companies were purchasing prior to the January change.

This joint venture comes after a longstanding partnership between St. Petersburg, Fla.-based General Dynamics and Düsseldorf, Germany-based Rheinmetall Defence. For more than a decade, the two companies have worked together on numerous 120 millimeter ammunition projects, such as the development and production of the KEW-A1 and KEW-A2 advanced tungsten kinetic energy ammunition for Abrams users worldwide.

As Armin Papperger, member of Rheinmetall AG’s executive board explains, "Thanks to DMI, we will be able to respond better to our global customer base's desire for an increased product portfolio in the future as well as providing an expanded set of services."

"Under DMI, we will continue to build upon that success within our existing customer segments while we expand our product offerings, including the Rheinmetall DM 11 multipurpose cartridge, recently fielded by the Marines, which adds another powerful capability to the warfighter's arsenal," Michael Wilson, president of General Dynamics Ordnance and Tactical Systems, said in a press release.

A logical combination
A joint venture of this nature in the defense sector might come as expected news to many in the industry.

A report by the Deloitte Touche Tohmatsu Limited Global Manufacturing Industry group titled “2012 Global aerospace and defense industry outlook: A tale of two industries” projected the financial performance of defense companies would likely be similar to its 2011 performance, with decline in revenues offset by cost-cutting and aggressive growth actions, leading companies to re-evaluate their options.

“Continued global economic challenges coupled with revenue gaps and cost pressures may result in margin contraction for global defense players,” the report states. “As a result, the defense sector is likely to undergo more streamlining of its cost structure, divestiture of non-core assets, and additions of gap filling, as well as transformation acquisitions. However, the defense sector will likely continue to develop game-changing technology innovations in areas such as cyber-security, directed energy, high-powered microwave weapons, hypersonic missiles, long-range and high-altitude unmanned aerial systems and extraordinary software that can trace financial transactions of known terrorists.”

According to VanBrocklin, developing new technology is definitely a goal the two companies share and one that will be continued in DMI. MM