Arms Manufacturer Renk May Evade Israel's Weapons Delivery Ban
In a significant development, German defense supplier Renk is actively considering a move to produce gearboxes for Israeli tanks in the United States, as a response to a potential export ban from Germany.
The controversy surrounds a temporary ban on exports of arms goods, announced by German Chancellor Friedrich Merz, that could be used in the Gaza conflict. Renk, based in Augsburg, Germany, supplies gearboxes for Israeli tanks and feels a responsibility to ensure that Israel can maintain its deterrent capabilities, particularly at various borders including Gaza.
CEO Alexander Sagel of Renk stated that while the company will comply with German law, the move to the U.S. is necessary to bypass the restrictions imposed by Chancellor Merz’s government. The ban, which does not allow for the export of arms goods to the Gaza conflict, aims to prevent the supply of goods that could potentially be used in the conflict.
Renk's business with Israel represents about 2-3% of the company’s sales. The potential workaround involves the relocation of production of gearboxes for Israeli tanks to the USA. The company did not provide details on the number of gearboxes in question.
The financial impact of the ban on Renk could reduce operating profits by a mid single-digit million euro figure in the latter half of 2025. The plan is still under active discussion amidst efforts to understand the full consequences of the embargo decision.
The news of Renk's "Plan B" was reported by The Financial Times, with Sagel emphasizing that the need for Israel to maintain its deterrent capability is not only necessary in Gaza, but also on other borders.
This development comes as Israel faces potential embargoes on military exports, with the potential to impact its defense capabilities. Renk's active consideration of relocating production to the U.S. underscores the complexities and challenges of international arms trade regulations.
