In a dramatic geopolitical twist, German defense powerhouse Renk Group AG will move Israeli military production to the United States after Chancellor Friedrich Merz froze critical arms exports — sparking outrage in Jerusalem and rebellion within his own political bloc.
German defense manufacturer Renk Group AG is executing a “Plan B” to fulfill its long-term military contracts with Israel by shifting production to its U.S. facilities, following Berlin’s abrupt decision to suspend arms deliveries that could aid IDF operations in Gaza.
“We started to develop a plan B because we have long-term delivery contracts,”
— Alexander Sagel, Renk CEO
The decision stems from Chancellor Friedrich Merz’s Aug. 8 indefinite arms embargo — a move Israeli leaders blasted as “rewarding Hamas terrorism.” Renk, a global leader in propulsion and drive systems for armored vehicles, stressed the disruption will be a major headache for Israel.
“For the Israelis, it really is a pain,” Sagel admitted, adding that the company is coordinating with both German and Israeli authorities. Contracts with Israel represent 2%–3% of Renk’s business, but the political symbolism of Berlin’s stance far outweighs the numbers.
Netanyahu’s Fury: “Germany is Rewarding Terrorism”
Prime Minister Benjamin Netanyahu personally called Merz to express deep disappointment, accusing Germany of siding against Israel in its war to destroy Hamas.
“Instead of supporting Israel’s just war against Hamas… Germany is rewarding Hamas terrorism by embargoing arms to Israel,”
— Prime Minister’s Office Statement
Netanyahu reiterated Israel’s mission: “Free Gaza from Hamas and enable a peaceful government to be established there.”
Backlash in Berlin’s Own Ranks
Merz’s decision triggered open dissent inside his governing bloc. The Christian Social Union (CSU) — the Bavarian sister party to Merz’s CDU — claimed it was blindsided and condemned the shift as “a departure from decades of foreign policy continuity toward Israel.”
CSU faction leader Alexander Hoffman vowed to raise the issue in coalition talks, while lawmaker Stephan Pilsinger warned:
“We feel like we benefit more from Israel in terms of security policy than Israel benefits from us.”
With Renk’s relocation marking the first tangible crack in German-Israeli defense cooperation, analysts warn more companies could follow suit — further straining Berlin’s long-standing role as a strategic ally to the Jewish State.
