German Defense Giant Renk Taps Automotive Talent to Fuel Rapid Expansion

As geopolitical tensions rise and military budgets soar, German defense firm Renk is aggressively ramping up production — and it’s turning to the struggling automotive industry to find the talent it needs to scale.

Earlier this year, Germany approved a landmark defense spending package, unlocking billions in funding to modernize and expand Europe’s largest military-industrial base. Amid the backdrop of the war in Ukraine and growing uncertainty in transatlantic security alliances, Germany’s defense sector is undergoing rapid transformation.

Renk’s Shares Surge as Demand for Tank Components Skyrockets

Renk, a global leader in tank gearboxes, is riding a major wave of military investment. The company’s share price has soared over 300% in 2025, while its order backlog jumped 164% to reach €549 million ($622 million) in the first quarter alone.

To meet skyrocketing demand, Renk and other German defense companies like Rheinmetall and Hensoldt are actively recruiting from the auto industry — once Germany’s economic stronghold but now grappling with slowing growth, EV transitions, and trade tensions with China and the U.S.

Leveraging Automotive Know-How for Defense Innovation

Renk’s strategy has been shaped by its leadership team’s deep automotive experience. CEO Alexander Sagel and COO Emmerich Schiller previously held senior roles at Mercedes-Benz (formerly Daimler) and Mercedes-AMG GmbH.

“We’re absolutely benefiting from automotive expertise,” Sagel told CNBC, confirming that many recent hires come from car manufacturing backgrounds.

Schiller added that Renk is specifically looking for engineers with experience in lean manufacturing, continuous improvement, and production line optimization — key principles from the auto world that can boost quality and efficiency in defense manufacturing.

Bridging Two Transforming Industries

Germany’s largest trade union, IG Metall, confirmed an increasing trend of defense firms targeting displaced or at-risk workers from the auto sector.

“These shifts are driven by two major trends: the automotive sector is undergoing a profound transformation — electrification, digitalization, new mobility — while the defense sector is expanding rapidly due to political priorities,” IG Metall said in a statement.

Still, the union cautioned against overreliance on defense as a job creator, emphasizing the need for a long-term vision focused on peace, not just rearmament.

‘Killing Two Birds With One Stone’

A Deutsche Bank research note highlighted that Germany faces significant auto industry overcapacity, with over 100,000 jobs potentially at risk. At the same time, the defense sector is under-scaled and urgently needs skilled labor.

“This is a historic opportunity to kill two birds with one stone — redeploy Germany’s automotive prowess to military production,” analysts noted.

The German Association of the Automotive Industry (VDA) echoed this sentiment, stating that it welcomes any initiative that enhances Germany’s competitiveness as a production hub.

“Germany is no longer internationally competitive in industry,” a VDA spokesperson said. “We support initiatives that create growth and jobs.”

A Workforce in Transition

Speaking to CNBC’s Squawk Box Europe, Monika Schnitzer, Chair of the German Council of Economic Experts, said the shift from automotive to defense work is an opportunity that “should be seized.”

“We know that layoffs in the auto sector are coming. These workers will be needed elsewhere, and we must facilitate that transition — including through reskilling programs,” Schnitzer said.

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Source: CNBC