US arms company Covenant is building a factory for cruise missiles in Leipzig

The turning point as a result of the Russian war of aggression led to an expansion of the armaments industry in Germany. A producer of cruise missiles is now setting up shop in Leipzig. These can reach targets well over 1000 kilometers away.

The US defense company Covenant has opened its production facility in Leipzig to produce long-range cruise missiles. Production of the Anthem weapons system should begin in 2027, said company boss Michael Kaufman. In the first year, 1,000 units are to be produced in the Saxon city. The aim is to have 5,000 copies by 2028.

Leipzig will be Covenant's largest location worldwide, Kaufman said. European customers will be supplied from there. In the future, several hundred people will work in production. The US company also has a factory in Dallas, Texas, and a location in Israel.

The State Secretary in the Federal Ministry of Economics, Johannes Steiniger, emphasized the need for deterrence. "The best cruise missile is the one that never has to fly, but can fly," he said. Covenant is investing around 250 million euros. A US company is helping to build the basis for Europe's defense - that is a strong political signal. Anthem can carry a 200 kilogram warhead and, according to Steiniger, has a range of well over 1000 kilometers. The cruise missile is described as a weapon for precision strikes deep into enemy territory ("deep strike").

The missiles are assembled in Leipzig. According to the company, explosives are only loaded on site at the customer's premises. With the targeted annual production of 5,000 units, armies in Europe would be able to build up significant stocks, said the State Secretary.

The company wants to offer the weapon system significantly cheaper than systems currently available on the market. Covenant explains that Anthem will cost six figures, less than a million, while other weapon systems of this type typically cost several million dollars each.

Kretschmer is happy about the settlement

Saxony's Prime Minister Michael Kretschmer welcomed the US company's settlement. "We are in a time in which we have to position ourselves securely. Freedom, democracy and prosperity cannot be achieved without security. And the best security is still deterrence. That's why it's good that we are also active in this area," said the CDU politician.

The production hall is located in the north of Leipzig. Covenant has rented an existing commercial hall. Before production begins, the authorities must approve the conversion of the warehouse into a production hall. But that was more of a formality, they said.

Covenant was only founded in 2024 and is headquartered in Washington D.C. The company says it has raised more than $250 million (215 million euros) from investors in three financing rounds.

Among the donors is the Founders Found, of which Peter Thiel is one of the co-founders. He is known for his libertarian and right-wing conservative positions, his closeness to US President Donald Trump and his criticism of liberal democracies.