Defense Contractor Hensoldt Capitalizes on Automotive Sector Turmoil

German defense firm Hensoldt partners with Aumovio to recruit 600 skilled engineers from the auto industry, aiming to convert its €8.8B order backlog into revenue.

As Germany's automotive industry undergoes significant workforce reductions, defense electronics specialist Hensoldt is strategically positioning itself to benefit. The company has initiated a new partnership with automotive supplier spin-off Aumovio, designed to channel hundreds of skilled engineers directly into the defense sector. This move directly tackles Hensoldt's most pressing constraint: a severe shortage of specialized technical staff amidst a period of record-high order backlogs.

A Strategic Hiring Push in Southern Germany

Hensoldt's operational growth is currently hampered not by demand, but by capacity. For the full year 2025, order intake surged by 62% to reach €4.71 billion. In contrast, revenue expanded by a more modest 9.6% to approximately €2.46 billion. The company's order book has now ballooned to over €8.8 billion, a figure exceeding three times its annual revenue. To bridge this gap, management is pursuing an aggressive recruitment and investment strategy, planning to hire 1,600 new employees in 2026, following 1,200 hires the previous year. Concurrently, €1 billion is earmarked for physical capacity expansion through 2027, with a focus on its German operations.

The recently signed agreement with Aumovio is a cornerstone of this talent acquisition plan. It offers a direct pathway into the defense industry for up to 600 employees at the automotive supplier's southern German sites in Ulm, Lindau, and Markdorf. This initiative aligns with Aumovio's own strategic restructuring, which involves cutting around 4,000 positions by the end of 2026. Hensoldt is specifically targeting the profiles of systems engineers, software developers, and electrical technicians made available by this shift, with geographic proximity between facilities expected to facilitate a smooth transition.

This targeted recruitment approach is becoming standard practice for the Taufkirchen-based group. Similar cooperative agreements were established last year with Bosch and for a shuttered Continental plant in Wetzlar, Hesse. According to company statements, further agreements within the struggling automotive sector are currently in preparation.

Market Performance and Upcoming Catalysts

Investors are closely monitoring these operational challenges. Hensoldt shares closed Thursday's session at €79.15, trading slightly below the 50-day moving average of €81.90. The forthcoming audited group financial report, scheduled for release on Thursday, March 26, will provide concrete insights into current business performance and hiring progress. Further indicators regarding the pace at which the massive order backlog is being addressed will come with the first-quarter figures on May 6.

For the current fiscal year, company leadership has set a revenue target of around €2.75 billion, with an anticipated EBITDA margin between 18.5% and 19%. The success of its specialized recruitment drives and capacity investments will be critical to achieving these goals and converting its unprecedented order book into delivered growth.