This summer, Melbourne, Fla.-based defense contractor L3Harris Technologies Inc. sold off its Muskegon Township-based Combat Propulsion Systems operation to German defense contractor RENK Group. With the move, RENK established the existing 1.2 million-square-foot facility, located at 76 S. Getty St., as the headquarters for what is now known as RENK America. RENK Group manufactures automatic transmissions and gearing for the armored vehicle, defense and civil marine, energy production, plastics, and oil and gas sectors. The company employs 2,600 people globally and generated 550 million euros in revenue last year, which equates to approximately $650.5 million. MiBiz spoke with RENK America CEO Ted Trzesniowski, who also managed the operation when it was part of L3 Harris, about what to expect from the new ownership.
L3 Harris is an $18 billion business with a large focus on satellites and technology, while RENK Group seems to be a better fit for the Combat Propulsion Systems division. What are the benefits of being with RENK?
We were very happy that this new owner understands our business and comes from the same line of business that is focused on the technology. (With L3Harris), there was little attention to details, and investment was not very easy to obtain. Here with the RENK Group, it’s all about creating jobs and new products and putting investments in Muskegon where we created the headquarters of RENK America.
What sort of synergy comes from the two like-minded businesses?
We have this very affordable solution. I say we have a Ford vehicle — very reliable, dependable, quite inexpensive and has quite a good reputation in the field. RENK comes with highly advanced technology. Their transmission is what I call the BMW of the industry. It comes with very increased functionality, and they were not able to get to the U.S. market.
Now, the product will be built in the United States. It will offer a higher functionality solution and more sophisticated solution to our military because we have it in the family. Second, our legacy product will continue, and I believe will be able to get the cost decreased on both product lines because our plant will be full of production.
What are the geographical benefits of establishing a headquarters in Muskegon?
We have over 100 years of history in the town.
... You can imagine 90 percent of my customers are within Detroit and Michigan, including primes like BAE (Systems) and GE. We are very blessed with very good talent that we were able to move within Michigan or actually tap into Grand Rapids. We have a lot of people from Grand Rapids who are commuting to Muskegon. When (RENK visited before the acquisition), they looked at this from the perspective of future growth. They looked at the building and the acreage that we can use for the testing of the vehicles.
Are any capital investments or workforce training plans on the horizon for the site?
Both are right now in planning for future years. The short answer, yes. One thing our business needed was some capital investment. We never hid this. We are looking for an opportunity to add increased efficiency. Why? At the end of the day, it would benefit our company and our customers.
Of course, training is something we always pay attention to. Definitely with the new workforce — and potentially people who would come and be cross pollinated from one business line to another — the training would be something that we’d intensify.
How pronounced have supply chain issues been in RENK’s corner of manufacturing?
We work with a lot of small businesses and smaller vendors and, because of the situation in the market and COVID, they are struggling. We have situations where, in spite of their agreements, they come back and say we cannot honor the pricing or we cannot provide the product on time. We’ve had this very often now and we have to manage that.
How does RENK America plan to engage with the local community?
We are proud sponsors of a few organizations, (including) the robotics team in the local high school. We work closely with the chamber of commerce and have a great relationship, actually. We had a couple meetings with local CEOs so we can exchange some ideas or some opportunities to collaborate in Muskegon County.
We’re supporting some of the local veterans organizations, which is absolutely dear to my heart and to my team. We believe that being part of the community is a very important part of who we are.