US startup Covenant to launch cruise missile production in Germany next year

BERLIN, Sept 9 (Reuters) - U.S. defense startup Covenant intends to start large-scale production of inexpensive cruise missiles at a German facility in early 2027, in response to European countries seeking long-range arms to counter perceived intensifying danger from Russia.

Covenant said it has so far secured one European contract for its Anthem missile and is in discussions with additional prospective customers, though it declined to name the nations involved. Initial deliveries of the ground-launched weapon are expected in early 2027.

Covenant co-founder and CEO Michael Kaufman told Reuters in an interview that the objective is to produce 5,000 missiles by 2028, or to achieve at least an annual run rate of 5,000 during that year, with the comment referring to the company's plant in the eastern German state of Saxony.

Germany and Britain are jointly developing a long-range missile with a range of more than 2,000 km, effectively giving it the ability to strike Moscow, as both countries seek to reduce their defence reliance on the United States. Berlin's only standoff weapon so far is the Taurus cruise missile, of which Germany has roughly 600 units.

As European faith in Washington erodes and calls grow for weaponry free of U.S.-made components, Covenant stated that the bulk of the components in its Europe-assembled Anthem missiles are sourced from the continent.

Kaufman said the supply chain for the Saxony plant has no dependence on the United States; less than 5% of the bill of materials comes from anywhere outside Europe, and the company aims to reduce that figure to zero.

Anthem could represent a fresh option for governments seeking to build up their long-range inventories, which today consist mainly of a limited number of high-cost missiles that are widely seen as too few to counter the massive arsenals held by a country such as Russia.

Anthem is designed not only to solve the problem of quantity, but also to be more economical than systems such as Raytheon's Tomahawk, costing in the mid-six figures per missile, according to Covenant.

U.S. defence major Raytheon intends to increase Tomahawk production from a current annual run rate of 60 to 90 missiles to 1,000 units per year.

Covenant also says it is developing a naval version of Anthem, whose payload of more than 200 kilograms is designed to strike targets both on land and at sea.

The company did not reveal the missile's full range, but maintained that Anthem is highly suitable for the European theatre.

Covenant President and Chief Growth Officer Abby Denburg told Reuters that winning a war or deterring an adversary depends on having the depth and arsenal needed to sustain the fight for days, weeks, or months on end.

Kaufman estimated that Germany and other European countries would need tens of thousands of long-range missiles to face a far-off adversary with a vast territory.