Germany orders 405 Puma tanks for $4.3B

BERLIN, July 8 (UPI) -- Germany's Rheinmetall scored a multibillion-dollar order from the German government for the Puma tank, a product the company hopes to export all over the world.

The company's PSM joint venture won a $4.3 billion contract to supply the German armed forces with 405 Puma tanks -- the biggest single order in many decades.

PSM is a 50-50 venture with another German military company, Krauss-Maffei Wegmann. It will deliver the Puma tanks for 10 years starting in 2010, Rheinmetall said in a statement.

"This is an important day for us. In terms of technology, the start of serial production of the Puma underscores Rheinmetall's cutting-edge position, and clearly demonstrates the efficiency and effectiveness of the German defense industry as a whole," Klaus Eberhardt, the company's board chairman, said in a statement. "The series order for the Puma makes sure that Germany maintains a world-class level of defense technology knowledge and expertise."

Dusseldorf-based Rheinmetall can use the huge contract: The company also supplies automobile parts, a sector that has been suffering in the current economic crisis. The Puma order will "safeguard a lot of jobs for years to come," Eberhardt said.

The Puma is key when it comes to modernizing the Bundeswehr, Germany's armed forces. It is intended to replace the Marder tanks, in service since 1971. The Puma is more mobile and better armored, and Bundeswehr officials say it is vital to protect German troops from an increasing number of insurgent attacks in Afghanistan. Chosen after a years-long bidding process that included intense testing of prototypes, the Puma is designed to withstand bazooka impacts and mine detonations.

The Puma order is one of the Bundeswehr's biggest equipment modernization projects, similar to the Eurofighter, the NH90 warfare helicopter and Airbus' heavy military carrier A400M.

Rheinmetall hopes that the order at home will culminate in many more from abroad.

"It's the most modern infantry tank on the market," Eberhardt told German daily Handelsblatt. "That's why I expect it to be sold to foreign countries." He noted that NATO countries already equipped with the Krauss-Maffei Wegmann's Leopard tanks -- such as Spain, Turkey, Greece and Australia -- would be ideal customers.

The Puma is one of Rheinmetall's several successful team projects with Krauss-Maffei Wegmann. Eberhardt said he could imagine merging with the company.

German companies are among the world's leading arms exporters. According to statistics compiled by the Stockholm International Peace Research Institute, they rank third in the military market behind Russia and the United States.