Reuters reported this week that the U.S. Army had used up much of its global stockpile of long-range precision missiles during the five-month conflict with Iran, raising concerns about military readiness for future crises.

President Donald Trump on Thursday played down concerns over weapons shortages, saying the U.S. had an almost unlimited supply of some munitions while acknowledging stocks of others were tighter. He added that U.S. defense companies were expanding production capacity.

Rheinmetall signed a memorandum of understanding with Lockheed last month to jointly produce Army Tactical Missile Systems, or ATACMS, at Rheinmetall’s Unterluess plant in northern Germany. Production facilities are due to be set up next year.

“Naturally, there will also be sufficient capacity to replenish the U.S. military arsenals depleted by the conflict involving Iran,” CEO Armin Papperger told Reuters in an interview conducted on Thursday but published on Friday.

“That won’t happen in two years. It will take much longer.”

Defense companies across the world are racing to meet a surge in demand as governments step up military spending amid conflicts in Ukraine and the Middle East, and U.S. pressure for Europe to take more responsibility for its own security.

Helping build Europe’s defenses

Rheinmetall has been among the biggest beneficiaries of Europe’s drive to raise defense spending.

Europe’s largest ammunition maker has pursued partnerships and acquisitions to rapidly expand production capacity to meet growing demand.

The ATACMS joint venture still requires approval, but Papperger said the process was well advanced and had the backing of the U.S. government.

The partners intend to target the global market for ATACMS missiles, he added. “There will be a market for missiles for the next 15 years.”

Rheinmetall expects the joint venture to generate its first revenue in 2028, the CEO said.

Talks needed with new Leonardo CEO

Papperger said Rheinmetall remained interested in acquiring Iveco’s military truck business from Italy’s Leonardo, but future talks would depend on new CEO Lorenzo Mariani.

“I had a handshake agreement with his predecessor,” said Papperger. “Mariani can decide on new terms, and we will see if they remain attractive to Rheinmetall.”

The deal is not at risk, Papperger added, saying he hopes to meet Mariani after the summer break.

Boxer contract expected by year-end

Rheinmetall, which on Thursday cut its sales outlook after Germany canceled its F126 frigate program, also expects a multibillion-euro contract to supply Boxer armored vehicles to the German military to be signed by year-end, Papperger said.

“There is absolutely nothing standing in the way,” he said.

Rheinmetall’s share of the contract would be worth €12.4 billion ($14.3 billion), while the total value, including partner KNDS, is expected to reach about €25 billion.

Boeing’s BSU-111/B Payload Delivery Unit is a wing-and-turbojet engine kit that converts a 500-pound Joint Direct Attack Munition (JDAM) into a long-range JDAM (JDAM LR) dubbed the GBU-75. The result is a gravity bomb with the reach of a cruise missile.

Boeing said it has spent nearly $100 million of its own money on the program.

“Scaling production of the GBU-75 will provide the fleet with an affordable, sustainable solution designed to eliminate long-range land and sea-based threats to U.S. and international forces,” said Bob Ciesla, vice president of Boeing Precision Engagement Systems.

The BSU-111/B wing-and-engine kit is the latest modification to the JDAM family, which has previously seen the gravity bomb receive a tail kit that steered it roughly 15 nautical miles and a wing kit that further stretched that distance to 40.

The Kratos-designed TDI-J85 engine pushes that past 300.

The JDAM LR’s capabilities go beyond land strikes. The QuickStrike Long Range mining variant pairs it with a bomb carrying a ship-tracking sensor. Boeing has shown concepts loading large numbers onto Air Force bombers, though no Air Force buy has been announced.

The Air Force Life Cycle Management Center at Hill Air Force Base, Utah, buys JDAM for both the Air Force and U.S. Navy. The first GBU-75s are bound for the Navy.

The Navy demonstrated the weapon back in April, when Super Hornets released two JDAM LRs over the Point Mugu Sea Range off California.

The April 1 round separated cleanly, fired up its engine and flew 34 minutes before landing within meters of its target. The April 3 round added altitude changes and maneuvering. Each covered roughly 200 nautical miles.

When announcing those tests in April, Capt. Sarah Abbott, the Navy’s Precision Strike Weapons program manager, emphasized the need to give the fleet’s JDAMs greater standoff range.

“As Naval Air Forces in theater continue to rely heavily on JDAM systems, the program recognizes a critical need to provide the fleet with greater standoff range,” she said. “This new capability allows pilots to engage targets from significantly safer distances, maintaining a tactical advantage in contested environments.”

Reusing existing infrastructure is a key aspect of the program’s appeal.

Navy budget documents describe JDAM LR as a modification to the baseline program, built on the existing production line and guidance hardware. Any jet that can drop a conventional JDAM can carry the new variant without modification, according to Boeing’s release.

The award, which had not appeared in the Pentagon’s daily contract announcements as of Aug. 5, is an undefinitized action, meaning Boeing began work before the two sides agreed on a price. The Government Accountability Office has long called these contracts risky because contractors are reimbursed for allowable costs, regardless.

Boeing’s release did not say how many GBU-75s the contract buys, how much they cost or when deliveries begin.

Rheinmetall now expects sales in the range of €13.7 billion to €14.2 billion ($15.8 billion to $16.4 billion), down from €14.0 billion to €14.5 billion previously, based on a €300 million hit to its naval division.

It also cut its order book guidance to more than €100 billion, from roughly €135 billion previously, and lowered its capital expenditure target to 8%-9% of sales from 16%.

The company left its free cash flow conversion ratio and margin targets unchanged and said it remained on track for record growth.

JPMorgan analysts said they had expected the canceled frigate program to have made more of an impact beyond 2026 and said the downgrades could signal slower growth in 2027-28.

Rheinmetall had reported a nearly 70% jump in second-quarter sales to about €3.3 billion, with all business segments contributing to the rise, in an unscheduled release last month.

Its shares fell as much as 4% in early trading before paring losses to trade 1.2% down by 0745 GMT.

DENTED AMBITIONS

Rheinmetall has seen its fortunes soar with Europe’s renewed interest in building up its defenses after Russia invaded Ukraine in February 2022, with Europe’s largest ammunition maker targeting annual sales of up to €50 billion by 2030.

The company completed the acquisition in March of the warship division of German shipbuilder Luerssen as part of its ambitions to become a bigger player in the naval sector.

It has also been considering acquiring German Naval Yards Kiel and promised to reach a final decision within weeks after a rival bidder withdrew from the process last month.

The German government’s decision in June to scrap a delayed frigate program for which Rheinmetall had looked likely to secure the contract tempered the company’s upward momentum.

“In the naval business, too, we are looking to the future and are working hard to fulfil our current maritime orders as a reliable partner with a high level of expertise, and to secure new ones on the international stage as well,” said Chief Executive Armin Papperger on Thursday.

The Trump administration in December announced its intention to build a new class of large surface combatants, designated as the Trump-class guided missile battleship.

If built, the 35,000-ton nuclear battleship, according to the report, will be the most heavily armed surface vessel the U.S. Navy has ever built, possessing anti-air, land-attack and anti-ship missiles, hypersonic missiles, nuclear cruise missiles, large lasers and a rail gun.

“If built to those specifications, the ship would be the largest surface combatant in the world and larger than any surface combatant built for the Navy since World War II,” according to the report. “It would be more than three and a half times the size of the Navy’s Arleigh Burke-class guided missile destroyer and more than twice the size of the Zumwalt-class guided missile destroyer.”

The Navy projects that between 2028 and 2056 it will build 15 Trump-class guided missile battleships, with the subsequent 14 costing $18 billion each. By contrast, the USS Gerald R. Ford, the U.S. Navy’s premier nuclear-powered aircraft carrier, cost approximately $13.3 billion.

By 2058, the total tonnage of “large surface combatants to be constructed would need to increase by 60 percent,” which the report notes “could be a challenge for the shipbuilding industry.”

The shift away from small surface combatants would mean that by 2035, shipyards would need to produce 12% greater tonnage under the 2027 plan than under the 2025 version, according to CBO’s estimation.

To keep pace with the service’s aims, the Navy would need to build a battleship about every other year from 2028 to 2056, the report notes, while continuing to produce two DDG-51 destroyers per year.

Last March, the Government Accountability Office released a report detailing nearly two decades of lackluster progress in U.S. shipbuilding. According to the GAO, not enough ships have been built, newly constructed ships are failing to function as expected and ships are being delivered up to three years later than ordered.

In a statement to the Senate Armed Services Committee, Shelby S. Oakley, a director at GAO, said that unrealistic expectations of costs and timing have diverted resources and introduced delays in shipbuilding, with the result that Navy programs and shipbuilders have been “effectively made to operate in a perpetual state of triage.”

The report also notes that while the price tag will be immense up front, over time, by switching to nuclear power, it would reduce the battleship’s operating costs by eliminating the need to purchase fuel. The GAO did not provide an estimate of possible savings.

Since the December announcement, the cost of Trump-class battleships has been a moving target, with the updated $23.4 billion roughly six billion more than the initial Navy projection.

Firestorm Labs manufactured more than 1,000 parts and 12 of its proprietary 3D-printable first-person view Squall drones aboard the Wasp-class amphibious assault ship USS Essex as it transited toward RIMPAC 2026 in Hawaii, according to a release.

“Every part xCell printed on deck is one that doesn’t need to be flown or shipped across contested waters — cutting the fuel, aircraft hours, and personnel it takes to keep a ship operational,” a social media release said. “Repairs that once meant days or weeks waiting on a resupply run can now happen in hours, on station.”

Firestorm Labs created the xCell as a factory-in-a-box that can be deployed aboard U.S. Navy vessels to churn out unmanned aerial systems and spare parts for expeditionary warfare.

As waves as high as 12 feet crashed against the ship, service members assembled drones that were later flown as adversary aircraft during a counter-drone exercise at RIMPAC 2026 in Hawaii.

The service members also helped print mechanical test components that assessed the efficacy of the 3D printer used for drone production and fabricated military repair parts that crew members of the USS Essex needed.

The Defense Department, and Navy in particular, is laser-focused on building out modular payload capabilities that can deliver mission-ready assets for the service.

Chief of Naval Operations Adm. Daryl Caudle announced the “containerized capability campaign plan” in March at the McAleese Defense Programs conference.

Caudle outlined a vision in which transportable containers housing defense capabilities such as drones and weapons can be deployed to any region in the world.

In May, the Pentagon announced framework agreements with defense companies Anduril, CoAspire, Leidos and Zone 5 to acquire more than 10,000 containerized missiles over three years beginning in 2027.

The move signaled the launch of the “Low‑Cost Containerized Munitions (LCCM) program.”

The extension is in line with the Trump administration’s efforts to curb illicit narcotics flowing into the United States via alleged drug-carrying vessels in the Caribbean Sea and eastern Pacific Ocean.

Since 2023, Saildrone’s USVs have worked in coordination with the U.S. Navy, supporting the Joint Interagency Task Force South (JIATF-S) and U.S. Naval Forces Southern Command/U.S. Navy Fourth Fleet, per the release.

“The continuity of Saildrone’s presence along the southern border for nearly three years demonstrates the strategic value we bring as the world’s most experienced operators of unmanned surface vehicles,” said Saildrone President VADM (ret.) John Mustin. “Our unmatched ability to remain on station and on mission in critical regions for months at a time is why our fleet serves as a powerful deterrent to bad actors. We look forward to continuing to partner with the Navy in its mission to secure the country’s maritime approaches and southern border.”

The 33-foot-long Voyager is designed for persistent surface and subsurface surveillance and can also conduct nearshore mapping missions and seafloor characterization, the release states.

Able to remain “on mission and on station” for months at a time, the USVs are “both a deterrent and an alarm” along the U.S.’s expansive southern maritime border, according to the company.

Since September 2025, the U.S. military has conducted strikes against alleged drug-carrying vessels in the Caribbean Sea and eastern Pacific Ocean in support of what the Pentagon has called continued counternarcotics efforts.

As of June 22, the Trump administration and U.S. military have disclosed 66 strikes, killing at least 196 people.

Since the start of the year, at least six defense-automotive tie-ups have been announced, as President Emmanuel Macron’s government seeks to combine the scale, automation and cost discipline of France’s car sector with one of the fastest-growing segments of military technology.

Ukraine and Russia’s use of drones has reshaped warfare, and that has prompted France and its European allies to prioritise drone production, as pressure from Washington on Europe to boost its military capabilities has added urgency.

The projects indicate France is building an industrial base capable of producing tens of thousands of drones a year — a scale difficult for defense startups to achieve alone, albeit one still dwarfed by Ukrainian and Russian efforts.

FRANCE AIMS FOR SCALABLE DRONE PRODUCTION

“Why now? Because the need is now, drones are now,” Christophe Périllat, chief executive of auto parts supplier Valeo, told reporters at the end of July. “And why in France? Because we’re being asked to guarantee our sovereignty.”

French defense officials do not anticipate a near-term need to deploy a large number of drones in the skies above France, but say it must be prepared for conflict.

The goal is to give France the ability to produce drones quickly and ramp up output should a crisis arise, they say. A July report by the French Senate’s defense committee described France’s stock of just a few thousand drones as “insufficient to achieve a critical mass.”

Valeo has said it will manufacture electric drone motors in France for defense technology firm Harmattan AI. Meanwhile, Forvia unveiled a partnership last week with a European defense company specialising in AI-powered counter-drone systems and is weighing plans to build capacity in France to manufacture 1,000 interceptor drones each month.

Renault, already working with Turgis & Gaillard to develop a long-range drone, partnered with Thales in June to industrialise production of the Toutatis kamikaze drone, targeting up to 1,000 units per month from 2027.

French drone maker Delair teamed up with German automotive supplier Schaeffler the same month to establish a French production line capable of producing around 100 drones per day by November.

SIMPLIFYING DRONE PRODUCTION FOR SCALE

If the plans announced by Renault, Schaeffler and Forvia are realized, combined output could reach 60,000 units per year. In a conflict, many more would be needed.

Drones have been used in warfare for decades, but the war in Ukraine has seen an explosion in scale.

Drones now dictate the flow of the battlefield, notching up the vast majority of kills. The front line has turned into a “kill zone,” with soldiers hiding underground from the constant aerial threat.

After Russia’s full-scale invasion in 2022, Ukraine quickly accelerated its use of drones for reconnaissance, battlefield combat and long-range strikes. President Volodymyr Zelenskiy said in July that it will produce 10 million in 2026.

Ukraine now has hundreds of drone makers, big and small. Some even produce more than Ukraine’s military can buy, and the government has cautiously moved towards allowing them to export some excess production.

Patrick Pailloux, head of France’s defense procurement agency, said he was working in particular with auto subcontractors to design drones that France will be able to produce in large quantities.

“It’s not the same: producing a drone in a defense start-up and making something that can be reproduced in very large volumes using production-line robots,” he said.

Renault CEO François Provost said in June the Toutatis kamikaze drone was being redesigned with fewer components and from injection-moulded plastic, enabling cheaper, higher-volume production than the current 3D-printed model.

ENOUGH DRONES TO TRAIN ON, BUT NOT MILLIONS

Defense officials say the challenge is scaling up production capacity while not building stockpiles that could soon become obsolete.

Patrice Caine, CEO of French defense technology group Thales, said this summer that drones were “objects that evolve quickly” under the impetus of technological advances.

Pailloux said France needed “enough so that we can train, and (the production capacity) to be able to withstand a shock”.

Prime Minister Sebastien Lecornu pledged a €150 million ($175 million) investment to develop a dedicated drone sector last December.

But Antoine Level, head of France’s drone industry association, said Germany was ahead of France in funding short-range drones, and that there were still “not enough orders to truly stimulate the industry.”

The world’s largest defense contractor is negotiating with NioCorp Developments for the supply of scandium, and Teck Resources and 5N Plus for the supply of germanium, both of which are used in military equipment ranging from aircraft components to infrared sensors, the sources said.

The deals would mark a significant step in the U.S. push to build domestic mineral supply chains, but face hurdles: Chinese suppliers have long offered lower prices, and U.S. mining and processing capacity remains limited.

Lockheed makes the F-35 Lightning II fighter jet, Patriot interceptor missiles and other weaponry for the U.S. government. As China has tightened controls on critical minerals exports in recent years, Trump has pressured Lockheed and its peers to support U.S. mines with long-term supply deals.

Last month, he signed an executive order making it harder for defense contractors to obtain waivers that had allowed them for years to buy minerals from China and other prohibited foreign suppliers.

That order has highlighted how far behind U.S. miners and processors are in their race to match China’s market dominance, even as dozens of U.S. projects for a range of minerals are under development, Reuters reported last week.

Colorado-based NioCorp Developments has signed a preliminary deal to supply Lockheed with 15 metric tons per year of scandium, one of the 17 rare earths that can be used to make lightweight, corrosion-resistant alloys for aircraft, according to a source familiar with the agreement and details seen by Reuters. These have not been previously reported.

NioCorp will supply the metal from its Nebraska mine, slated to open by 2028 with annual production of 100 metric tons.

The agreement would need to be finalized, although the two companies have an existing relationship as part of a Pentagon-funded research program.

The contracted volume would be roughly a quarter of global scandium demand, which the U.S. Geological Survey estimates at about 60 metric tons and rising.

“Both companies recognize how important scandium has become to the future of American defense technology,” said Mark Smith, NioCorp’s CEO.

Lockheed said it appreciated “the work NioCorp is doing to establish a domestic source of scandium.”

The U.S. has not mined scandium since 1969. Rio Tinto is the only North American scandium producer, with capacity to produce roughly nine metric tons annually.

Germanium negotiations

Separately, Lockheed is in talks with Teck Resources for a supply of germanium, used to make infrared sensors and other military equipment, a second person familiar with those negotiations said.

Teck mines and produces a zinc and germanium concentrate from its Red Dog mine in Alaska. That concentrate is then smelted in British Columbia and the two metals are separated.

Teck does not break out its annual germanium production but has called itself the largest North American producer and fourth-largest globally. The USGS estimates that global germanium consumption is roughly 60 metric tons annually and rising.

The U.S. imports more than half of its germanium needs.

Lockheed is also in germanium supply talks with Quebec-based 5N Plus, which earlier this year received Pentagon funding to process the metal from recycled feedstock in Utah, the second source added.

“What Lockheed basically wants is a long-term supply chain security,” according to the second source. “Because they are under pressure, so they really want to know if the supply is coming from China or elsewhere.”

Negotiations with both Teck and 5N have been going on for more than a year. Pricing and the length of the contracts have been sticking points, according to the source.

Representatives for 5N were not immediately available to comment. Teck declined to comment on specific commercial agreements, but said it has agreed to work with the Canadian government to increase germanium processing in British Columbia.

Asked about the germanium discussions, Lockheed said it continuously assesses “the global critical minerals supply chain to ensure access to materials that support our customers’ missions.”

Chinese critical minerals prices have for years been cheaper than those from Western sources due to differences in mining practices, regulatory standards and other factors. Reuters reported earlier this year that Western governments are trying to set regional minerals prices free from Chinese interference.

The Next Generation C-sUAS Missile project comes as the U.S. and other nations are pursuing lasers, microwaves and other alternatives to kinetic anti-drone weapons, such as missiles and cannon, which are seen as too expensive and in short supply.

The Army wants to quickly develop an “extended-range, quick-response missile to defeat Group 2 and Group 3 small Unmanned Aircraft System (sUAS) threats,” according to the Army’s Sources Sought notice. The deadline is August 20.

The initial specifications are for a missile that can intercept a drone flying at 6 kilometers altitude, at a range of more than 16 kilometers. The ultimate goal is to destroy drones flying 8 kilometers high, at a range of more than 25 kilometers. Missile guidance would be via a radar seeker.

NGCM appears intended as a step up — but still compatible — with the Army’s Coyote C-UAS missile system.

“The Army is looking for NGCM to be produced and integrated into the existing Coyote Launch System to provide extended range, rapid launch time, and reduced time-to-target over current effectors,” the notice said.

The weapon is intended to stop Group 2 and 3 drones. Group 2 drones have a maximum gross takeoff weight of 21 to 55 pounds, fly below 3,500 feet and have a speed of less than 250 knots, according to the Department of Defense’s UAV classification system. This includes models such as Boeing’s ScanEagle. Group 3 drones, such as Insitu’s RQ-21 Blackjack, have a takeoff weight under 1,320 pounds and fly below 18,000 feet at a speed of less than 250 knots.

The NGCM missile should take less than five seconds to leave the launcher after the operator gives the fire command.

“The missile must be compatible with the Coyote Launcher with minimal to no modifications,” the notice said.

In addition, the missile must also fit with existing air defense systems, including the Sentinel A3/A4, LTAMDS and TPQ-53 radars.

The Army envisions the NGCM missile system in two versions. The fixed-site version would be equipped with a variety of sensors. A mobile version would be “mounted on tactical vehicles for employment at the halt and on-the-move, providing a scalable capability at the tactical edge.”

The Army is aiming for Technology Readiness Level 7 — prototype testing in the field — by the end of fiscal 2027. Contractors will need to have 50 missiles ready for operational assessment by the beginning of 2028.

Significantly, the Army desires missiles costing less than $150,000 apiece as part of a bulk purchase of 5,000 missiles. While that’s a bargain compared to a $4 million Patriot air-defense missile, critics may still question the economics: An Iranian Shahed-136 drone costs around $35,000.

That’s one reason for the drive to develop anti-drone lasers that, theoretically, cost only pennies per shot. On the other hand, missiles can function in bad weather that disrupts laser beams.

Called the Guardian Angel, the four-wheeled UGV has already completed live-fire testing.

Thales Australia worked with two other Australian firms to create the new system. One was Chaos 1, which specializes in rapid assessments, prototyping and autonomous-system experimentation.

The second company was W&E Platt, which makes weapon mounts. Indeed, the Guardian Angel features its low-cost Remote Operated Weapon PLATTform, with an image showing the ROWP mounting a Dillon M134D Minigun.

Thales Australia said in a statement that this project showcases its “sovereign industrial strength, ability to meet the nation’s defense and security needs, and capacity to deliver and manufacture autonomous systems and solutions”.

The company said the project was driven by one aim: to keep Australian troops safe.

However, a spokesperson explained to Defense News, “The Guardian Angel is a prototype and wasn’t specifically built for market. It’s part of a program to test and strengthen our capability in autonomous systems and solutions.”

Nonetheless, its completion paves the way for future platforms, in which a containerized mission system could offer capabilities such as medical evacuation, troop support, cargo transport and fire support.

“UGVs can preserve soldiers by operating in high-risk environments while providing a clear tactical advantage, assisting operations on the battlefield,” Andrew Downes, vice president of Land Thales Australia, commented. “They offer scalable, agile, cost-effective capability that can increase operational reach without increasing risk to personnel.”

Meanwhile, Benny Johanson, Founder and CEO of Chaos 1, described the process as “rapid prototyping in true form — little time, extremely chaotic and high risk.“

“In just six weeks we moved from a concept graphic to live-fire demonstration, and many said it couldn’t be done,” Johanson said, adding that the Guardian Angel “proved the sheer horsepower industry can generate for the warfighter at speed.”

Australian industry has developed a number of UGV designs, and the army is actively experimenting with some of them. For instance, it is trialing M113AS4 armored personnel carriers converted into modular robotic vehicles by BAE Systems Australia.

BAE Systems Australia’s largest platform is the ATLAS 8×8, fitted with an unmanned turret and 25mm Bushmaster cannon. It is currently in a prototype demonstrator status.

The Australian Army has also tested the tracked Warfighter UGV from Cyborg Dynamics Engineering. The army is already using the Ground Uncrewed System, affectionately known as GUS and produced by Outlook Industries, for remote coastal surveillance.

A couple of attritable UGV platforms also being tested are GaardTech’s Jaegar-C and DefendTex’s Banshee, small vehicles that can carry kinetic payloads.

“We’re about to bring into the next exercise UGVs. We can practice breaching minefields, for example, with sacrificial UGVs that might drag a tube full of explosives across a minefield — and we can detonate that,” Brigadier Ben McLennan, commander of the Australian Army’s 3rd Brigade, recently told Defense News. “That’s just one application. There’s a raft of other applications we’re making.”