German Contractor Considers Manufacture of Israel-Bound Weapons in U.S. To Bypass Government Embargo

Latest Developments

Potential Production Shift: German industrial manufacturer Renk Group AG has said that it is considering relocating the production of weapons parts intended for Israel to the United States to bypass Chancellor Friederich Merz’s suspension on exporting certain arms to the country. During the company’s first-half earnings call on August 13, Renk CEO Alexander Sagel said that the organization would comply with Merz’s export restrictions but has “started to develop a plan B because [it has] long-term delivery contracts [with Israel].” Sagel also said in an interview with the Financial Times that the company would comply with German laws but was “discussing a plan B” to “relocate production of these specific transmissions to the U.S.”
Merz Ban Sparks Party Backlash: Merz is facing pressure from fellow conservatives following his August 8 decision to partially ban weapons exports to Israel. “The general consensus is that the communication surrounding the chancellor’s decision could have been handled better,” said Jürgen Hardt, a member of Merz’s Christian Democratic Union (CDU), adding, “One must conclude that certain people who one would actually expect to be involved were not specifically involved in this decision.” Meanwhile, the Christian Social Union, the CDU’s sister party in the state of Bavaria, confirmed that it “was not involved in this decision and … consider[s] that to be questionable,” according to the party’s parliamentary group leader, Alexander Hoffmann.
Elbit Recently Secured German Contract: Israel-based defense contractor Elbit Systems won a $260 million deal on July 28 to supply German A400M transport aircraft with its J-MUSIC Directed Infra-Red Counter Measure (DIRCM) system. DIRCM offers protection for jet aircraft against infrared-guided anti-aircraft missiles . All aircraft operated by the Israeli airline El Al are equipped with a similar DIRCM variant, known as the C-MUSIC.

FDD Expert Response

“The widespread dismay in Germany over Merz’s announcement suspending arms exports to Israel is encouraging and may eventually persuade the chancellor to reverse course. It should be remembered that Merz himself strongly criticized his Social Democrat predecessor, Olaf Scholz, for delaying arms supplies to Israel. Now, he has taken that policy a step further, perhaps in a bid to appease those EU member states like Spain, Ireland, and Slovenia that have embraced the Hamas narrative.” — Ben Cohen, Senior Analyst and Rapid Response Director

“It is essential that NATO countries focus on building up capabilities in the face of growing threats from Russia and the broader Axis of Aggressors. This is a terrible time for Berlin to pick a political fight with Israel, a world leader in defensive and offensive capabilities. Merz’s impulsive pivot away from his election campaign pledges on Israel will only serve the enemies of the West.” — Enia Krivine, Senior Director of FDD’s Israel Program and National Security Network