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German Auto Workers Shift Gears to Thrive in Booming Defense Industry

In a dramatic shift, Germany's automotive sector, a bastion of technological prowess and precision engineering, is facing an enduring crisis prompting thousands of its highly trained workforce to seek employment elsewhere. This unexpected turn of events has been catalyzed by the swift electrification of the auto industry and the growing competitive pressure from Chinese manufacturers. However, as one door closes, another opens, and for many of these skilled workers, the robust defense sector has emerged as the new land of opportunity.

A Reversed Stigma: The Rise of Defense Employers

Historically associated with so-called "sin industries" such as tobacco and gambling, defense companies are now seen in a different light, especially when contributing to the cause in Ukraine. High-profile arms manufacturers have seen a reversal of fortune since the onset of the Ukraine conflict two years ago. These once-stigmatized entities have rapidly evolved into coveted workplaces, especially when their operations cast them in the role of defenders aiding Ukraine's war effort.

The German defense sector, specifically, is bustling with activity and struggling to recruit quickly enough to meet demand. Hensoldt - a leader in the production of vital air defense sensors instrumental for intercepting Russian missiles in Ukraine - is testament to this trend. The company, until recently under the leadership of Thomas Mueller and now spearheaded by Oliver Doerre from April, is actively seeking to inject new lifeblood into its workforce. Its current objective is to welcome 700 new hires across various divisions over the course of the year.

An Uphill Battle: Equipping Ukraine for the Fight

In the backdrop of this employment shift lies the daunting military predicament faced by Ukraine. For each artillery round that Ukraine counts in its stockpile, Russia allegedly boasts tenfold that amount. This stark discrepancy, brought to light by Ukrainian President Volodymyr Zelenskiy, accentuates the colossal challenge of equipping Ukraine at a pace that matches the intensity of the conflict. The scramble to enlarge manufactures and scale output is palpable within the European Union's defense industry, which is straining to accelerate weapon and ammunition production to satisfy the demands of wartime necessity.

Reinventing the Arsenal: Rheinmetall's Strategic Boost

No company highlights the industry's revitalization quite like Rheinmetall, Germany's premier arms maker, which anticipates a staggering jump in sales to over €10 billion this year from €7.2 billion previously in 2023. Committed to fortifying its artillery capabilities, Rheinmetall aims to magnify its annual production of shells to an unprecedented 700,000 rounds by 2025 – a tenfold rise in output since the Russian incursion. This bold strategy has warranted a significant staffing surge, with around 4,000 positions filled globally since the onset of 2022, while the flood of applications continues to rise unabated.

In 2023 alone, Rheinmetall's German operations drew a whopping 108,000 job applicants, a figure proudly shared by CEO Armin Papperger during the company's full-year earnings discussion in March. With 38,500 applications already pouring in this year, the company is on track to surpass last year's influx.

The Rising Tide of Applicants: New Opportunities at Renk

Meanwhile, Renk, a prominent producer of gearboxes, corroborates this employment trend, reporting more than a doubling of applications since 2021. With predictions for figures to climb even higher in 2024, Chief Human Resources Officer Brigitte Schnakenbourg notes not just the quantity but the caliber of prospects has seen notable improvement. An influx of spontaneous applications from highly qualified candidates reinforces this observation. While Schnakenbourg has yet to witness a mass movement of former automotive employees to Renk, she remains optimistic that as the auto sector continues to contract and the allure of defense grows, this shift will materialize over time.

Indeed, the defense domain seems to offer more than just a sense of purpose – it offers financial stability as well. Data from the job platform Stepstone reveals that defense industry salaries are significantly more lucrative than in many other fields, averaging around €68,000 before taxes. “People find secure jobs here because the industry is booming,” Schnakenbourg remarked, highlighting the sector's financial health amid a thriving marketplace for defense products.

Industrial Resurgence: From Automotive to Armaments

Renk itself has recently attracted top-tier talent from the automotive sector, notably in the person of Emmerich Schiller, who joins the firm after over a quarter-century at Mercedes-Benz. Schiller's storied career includes stints as managing director and head of the prestigious Mercedes-AMG sports car division. In his freshly minted role as Chief Operating Officer for Renk, Schiller is entrusted with the critical task of ramping up production capabilities in response to surging order volumes.

Schiller does not mince words about the sector's past: “After decades in a slumber, production in this industry does not currently correspond to modern industrial standards,” he asserted, suggesting a significant gap in efficiency and innovation. Yet, it is this very gap that presents an opportunity. Former automotive workers bring with them the mastery of crafting high-quality products at a brisk pace, honed under the intense pressures of the auto industry. For Schiller, the logic is clear – transposing this wealth of knowledge and sophisticated skill set is not merely beneficial but essential during a period of such rapid and extensive growth.

A New Epoch: Defense as a Public Interest Pillar

Looking ahead, with the lack of a foreseeable conclusion to the conflict in Ukraine now entering its third year, the defense sector is expected to cement its status as a vital public interest component.

A dramatic cultural shift accompanies this newfound essentiality. Whereas once those employed within the defense sector might have opted for discretion regarding their place of work, this preference for secrecy has dissolved. “For the last 30 years, employees in defense would rather not say where they work in public,” explained a Hensoldt spokesperson. In stark contrast to those bygone days, the present narrative is one of pride and openness. Former Hensoldt CEO Mueller encapsulates this transformation succinctly: “Today, our sector is no longer in the dirty corner.”

In conclusion, it's evident that as Germany grapples with upheavals in its storied automotive industry, the defense sector stands ready to open its arms to a new cadre of expert workers. Transferring their highly sought-after skills, these workers are helping to reinvigorate an industry that is rapidly transforming from a taboo to a beacon of national pride and economic vitality. As companies like Hensoldt and Rheinmetall ramp up their talent acquisition and production capabilities, it’s clear that the industry's revival is well underway, bringing with it the promise of security, innovation, and a steadfast commitment to the public good in uncertain times.

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