Israel’s Rafael To Manufacture Parts For Iron Dome Air Defense At Struggling VW Car Plant In Germany

Volkswagen has reached a preliminary agreement with the State of Lower Saxony and Aurelius Capital on the possible sale of its struggling Osnabrück plant in Germany, which could see it transform from a car-making facility into a defence manufacturing hub.

Under the agreement, Volkswagen plans to sell the Osnabrück site to investment firm Aurelius Capital and the German state of Lower Saxony, where the factory is located. Under the terms of the deal, the former will hold the majority stake, while the latter takes a minority share.

The plan involves repurposing VW’s Osnabrück plant to manufacture air-defence systems and components for Germany and other European markets through cooperation with Rafael Advanced Defense Systems, one of the companies behind Israel’s Iron Dome air-defence system.

Vehicle production is scheduled to end in 2027 after years of uncertainty over its future. Currently, the plant employs around 1,800 people, but the proposed deal is expected to preserve over 1,200 jobs initially as it transitions from automotive production to defence manufacturing.

Oliver Blume, CEO of the Volkswagen Group, stated: “Time and again, the employees in Osnabrück have demonstrated just how much expertise, flexibility, and commitment this plant has to offer. The site can build on these strengths in the future as well.”

Olaf Lies, Economic Minister of the State of Lower Saxony, noted: “Germany and Europe must strengthen their capabilities and become more independent. Lower Saxony wants to help ensure that this creates value and secure employment. Osnabrück can play an important role in this context.”

The development marks a major departure for a factory with a long automotive history. Osnabrück has produced several Volkswagen and Porsche models over the years and is currently associated with the production of the Volkswagen T-Roc Cabriolet.

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