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Renk Taps Auto Sector Talent to Scale Up Amid Defense Boom

As Germany ramps up military spending in response to geopolitical tensions, defense company Renk is turning to an unlikely ally to meet soaring demand: the struggling automotive sector.

A historic €100 billion ($109 billion) defense fund passed earlier this year by Germany’s government has unleashed a wave of investments across the nation’s military-industrial complex. Companies like Renk, a leading manufacturer of gearboxes for tanks and military vehicles, are now experiencing explosive growth. Renk’s stock has surged more than 300% in 2024, while its order book jumped by 164% to €549 million ($622 million) in Q1 alone.

But scaling at this speed presents a significant challenge: talent. To keep up, Renk is hiring engineers and skilled workers from Germany’s auto industry—an industry facing an identity crisis and shedding jobs.

Auto Sector Layoffs Create a Pool of Skilled Labor

Germany’s automotive industry, long considered the backbone of its economy, is undergoing a seismic shift. The combined pressures of electrification, digitalization, competition from Chinese EV makers, and U.S. tariffs have weakened its dominance. A March 2024 Deutsche Bank report estimated that over 100,000 jobs across Germany's auto sector are at risk due to factory overcapacity and declining competitiveness.

This transformation presents what analysts are calling a “historic opportunity”: redeploying highly skilled workers from struggling auto firms into a defense industry in urgent need of scaling.

From Mercedes-Benz to Military Mobility

Renk’s leadership has close ties to the auto world. CEO Alexander Sagel previously worked at Rheinmetall and Daimler (now Mercedes-Benz Group AG). COO Emmerich Schiller held leadership roles at Mercedes-AMG GmbH, bringing deep experience in automotive production systems.

“We are absolutely benefiting from the influx of auto talent,” Sagel told CNBC in an exclusive interview at Renk’s headquarters in Augsburg, Germany. “These engineers bring a mindset of efficiency, continuous improvement, and lean production methods.”

Schiller echoed the sentiment: “We’re not just hiring people—we’re importing an entire culture of operational excellence. Auto engineers understand precision, mass production, and rapid iteration.”

Defense Meets Industry: A Symbiotic Pivot

This cross-sector hiring trend isn’t unique to Renk. Other defense companies like Hensoldt and Rheinmetall are also tapping into the automotive talent pool. According to IG Metall Lower Saxony, Germany’s largest industrial union, defense firms are actively targeting auto workers amid two concurrent shifts: the evolution of mobility and the political push for rearmament.

“While there are overlaps in technology and skills, we must be cautious,” said a spokesperson from IG Metall. “Rearmament provides short-term jobs, but it’s rooted in an unstable geopolitical environment. Our long-term goal must be peace, not permanent militarization.”

Yet the economic momentum is undeniable. The German Association of the Automotive Industry (VDA) acknowledged that “the automotive sector is increasingly engaging with adjacent industries” and welcomed initiatives that “enhance Germany’s appeal as a manufacturing base.”

A Lifeline for Laid-Off Workers—and for National Security

According to Monika Schnitzer, Chair of the German Council of Economic Experts, the transition is not just practical—it’s essential.

“These layoffs in the auto sector are real and unavoidable,” she told CNBC’s Squawk Box Europe. “It’s critical that we facilitate a smooth transition. This means reskilling and helping workers move into sectors where their skills are in demand—like defense.”

Analysts say the move could also help the German defense industry shift from bespoke, small-batch production to serial manufacturing, increasing profitability and responsiveness. For Renk and its peers, this means faster delivery times and greater adaptability in an uncertain world.

Bottom Line: Strategic Shift or Industrial Gamble?

Germany’s pivot from cars to tanks reflects the changing face of global industry. For workers facing layoffs in the auto industry, Renk’s recruitment offers more than just a paycheck—it provides a pathway to stay relevant in an economy increasingly shaped by geopolitical threats.

While the long-term stability of this shift is still debated, one thing is clear: Germany is rearming, and it’s doing so with the expertise of those who once built its luxury cars.