German defence firm says it will relocate to US if required to continue selling arms to Israel

German defence contractor Renk has threatened to shift production to the US in order to maintain sales of tank parts to Israel, after Berlin announced a suspension of arms exports that could be used in Tel-Aviv’s genocidal war in Gaza.

Alexander Sagel, chief executive of the Bavaria-based company, told the Financial Times that Renk had a “responsibility” to ensure Israel could “maintain its deterrence capabilities” — language that appears to ignore the mounting evidence of war crimes committed by Israeli forces during their ongoing assault on the besieged enclave. 

The group manufactures gearboxes for Israeli tanks and armoured vehicles, which are key components in the military’s ground operations in Gaza, where entire neighbourhoods have been flattened and more than 61,000 Palestinians have been killed, mainly women and children, since 7 October 2023.

Sagel said Renk would abide by German law but was exploring “plan B” options, including moving the production of transmissions to the US to circumvent the ban, which is still awaiting confirmation by Germany’s security council. Israel accounts for around 2–3 per cent of Renk’s annual sales.

Pressed on the morality of supplying Israel’s war machine, Sagel acknowledged it was “a difficult discussion” but maintained that Germany had an obligation to bolster Israel’s military edge — not only in Gaza, but “at other borders.”

READ: UN rapporteur accuses Israel of ‘one of cruellest genocides’ in modern history; urges arms embargo, global disengagement

The announcement comes as international condemnation of Israel’s military campaign intensifies. Norway’s $2 trillion sovereign wealth fund this week divested from multiple Israeli firms and severed ties with Israeli asset managers over concerns it was indirectly financing the Gaza genocide.

Germany’s Chancellor Friedrich Merz, a long-time ally of Israel, said his decision to halt certain weapons exports was in response to Tel Aviv’s plans to expand military operations in Gaza, a move he warned could lead to a full reoccupation of the territory and further stall ceasefire efforts. Israel has been occupying Gaza since 1967 and imposed a crippling siege on the besieged enclave since 2007.

Meanwhile, Renk’s financial results reveal it is benefiting from the wider European rearmament drive, with revenues rising 22 per cent in the first half of 2025 to €620 million ($682 million) and adjusted earnings before interest and tax up 29 per cent to €89 million ($97.9 million). Sagel conceded that the embargo could cut operating profit by “mid single-digit millions of euros” ($5.5–$7.7 million) in the second half of the year, but insisted the company would find ways to fulfil its Israeli contracts.

Israel’s ongoing operations in Gaza have relied heavily on tanks and armoured personnel carriers to push through densely built-up areas, with satellite images showing armour massing near Gaza City ahead of new offensives. Human rights groups have repeatedly called for an arms embargo on Israel, warning that continued military supplies make external actors complicit in war crimes and crimes against humanity.

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