Defense Companies Are Luring Germany’s Struggling Autoworkers

Germany’s automakers are in crisis. Electrification and competition from China are booting thousands of highly skilled workers back onto the job market. Luckily، many are eyeing a sector that can’t hire fast enough: defense.

Since Russia’s invasion of Ukraine two years ago، arms manufacturers have experienced something of a reversal of fortune. Once associated with the likes of “sin industries” such as tobacco and gambling، these companies are now seen as attractive potential employers – and particularly if they’re helping fight the war in Ukraine.

Hensoldt، which makes air defense sensors crucial to intercepting Russian missiles in Ukraine، has seen an influx of new employees، mainly engineers، coming from carmakers. “We benefit from the problems in other industries when building up our workforce،” said former CEO Thomas Mueller، who was succeeded by Oliver Doerre in April. The company is planning to hire 700 new employees across divisions this year.

Massive challenges facing Ukraine

Part of the push to bring in more workers has to do with the massive challenges facing Ukraine. For every artillery shell the country has left in stock، Russia has ten، according to Ukrainian president Volodymyr Zelenskiy. While companies are scaling up fast، the European Union hasn’t been able to produce weapons or ammunition quickly enough to meet wartime demand.

Rheinmetall، Germany’s biggest arms maker، expects sales to top €10 billion this year، up from €7.2 billion in 2023. It plans to expand its annual production of artillery shells to 700،000 rounds by 2025، a tenfold increase compared to before the Russian invasion، and has hired around 4،000 people globally since the beginning of 2022. Applications have only continued to soar.

Last year، 108،000 people applied for jobs at the company in Germany alone، CEO Armin Papperger said in the company’s full-year earnings call in March. Having already received around 38،500 applications this year، the company is on track to beat those numbers.

Gearbox-maker Renk has seen applications more than double since 2021، and those numbers are set to rise even further in 2024، says Chief Human Resources Officer Brigitte Schnakenbourg. The quality of applications has improved as well، she added. “We receive many more unsolicited applications from people with excellent profiles،” she said.

While Schnakenbourg has yet to see large numbers of former autoworkers joining the company، between downsizing at carmakers and the sector’s renewed appeal to workers، she thinks this might happen with time. And a sense of mission isn’t the only reason why skilled workers have been drawn to defense: According to the job platform Stepstone، salaries are higher than in other fields، with an average pay of around €68،000 before taxes. “People find secure jobs here because the industry is booming،” Schnakenbourg said.

Renk recently recruited Chief Operating Officer Emmerich Schiller، who spent over 25 years in management positions at Mercedes-Benz، including as managing director and head of operations for the Mercedes-AMG sports car division.

A time of unprecedent expansion

In his new role، Schiller will be tasked with scaling up output as order volumes increase. “After decades in a slumber، production in this industry does not currently correspond to modern industrial standards،” he said. Having been trained to make high-quality products quickly while under pressure، former autoworkers have the skills needed to shape the industry during a time of unprecedented expansion. “It makes sense،” Schiller said، “to transfer this know-how.”

With the war in Ukraine in its third year and not expected to wind down soon، the sector is likely to be increasingly seen as essential to the public interest.

While، according to a Hensoldt spokeman، “for the last 30 years، employees in defense would rather not say where they work in public،” that’s no longer the case.

“Today، our sector is no longer in the dirty corner،” said Mueller، the former Hensoldt CEO.