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After the scandal over the accuracy of the G36 assault rifle, the Bundeswehr wants a new standard weapon. The selection process lasted several years – the decision is a bitter one for former supplier Heckler & Koch.
The Defense Ministry wants to buy the new Bundeswehr assault rifle from Thuringian manufacturer CG Haenel (Suhl). According to information from the German Press Agency, the Defense Ministry informed the Bundestag politicians yesterday about the result of the selection process.
As a result of the tender process, the long-standing supplier Heckler & Koch (Oberndorf am Neckar) did not have the opportunity to order 120,000 new weapons worth almost 250 million euros. Haenel is already supplying the Bundeswehr with a sniper rifle. The company belongs to the Merkel Group, which is part of Tawazun Holding (United Arab Emirates). In the bidding process started in 2017, the Thuringian company submitted a weapon that, in extensive testing, was somewhat better suited to the requirements of the military and also proved to be economically advantageous, according to military circles.
Discussion about precision
An issue had developed around the G36 supplied by Heckler & Koch in 2012, which started with indications of precision issues. According to subsequent official investigations, these occurred after long sequences of fire or under the influence of heat. The weapon is valued by soldiers to this day.
For Heckler & Koch, the Berlin decision is a severe setback at an inopportune time. The company is heavily in debt: its financial obligations of € 249 million are approximately as high as the annual turnover (2019: € 239 million). After two years of losses, H&K finally became profitable again. However, the situation remains tense with the debt problem still unresolved.
H&K makes a quarter of its sales in the US.
A power struggle between two major shareholders of the company sparked riots. Majority shareholder Andreas Heeschen had to hand over a large bundle of shares to a Frenchman and his Luxembourg financial holding CDE due to a long-standing pledge transaction, CDE has been in charge since July.
For H&K, however, it is not the first time that a foreign investor has determined fortunes: until 2002, H&K belonged to the British defense company BAE Systems. 910 employees work at the company’s headquarters in Oberndorf in the Black Forest, and another 85 work in the US, where H&K has a handgun assembly plant. The US market has recently grown in importance and now accounts for a quarter of consolidated sales. Germany still accounts for a third of the company’s revenue, with a downward trend. In addition to the main customer, the Bundeswehr, the police receive weapons.
