A Volkswagen Car Plant In Germany Will Be Converted To Produce Air Defense Systems
- 7.09.2026, 20:40
The plant will manufacture components for the "Iron Dome."
Volkswagen, Europe’s largest automaker, is carrying out massive layoffs as part of a reorganization. Just a year and a half ago, Germany’s leading defense company, Rheinmetall, had its eye on Volkswagen’s plant in Osnabrück, considering converting it for tank production. But in the end, the plant will produce components for the “Iron Dome” air defense system, which Israel intends to share with Germany, reports The Moscow Times.
Following months of negotiations, the Israeli investment firm Aurelius Capital will acquire a controlling stake in the Osnabrück plant, which has been in operation for 125 years. The state of Lower Saxony, where VW is headquartered and which is the automaker’s second-largest shareholder, will receive a minority stake. The plant, which employs 1,800 people and is set to cease vehicle production in 2027, is slated to be converted into a manufacturing center for defense products.
The first, “flagship” project will be a partnership with Rafael Advanced Defense Systems, which manufactures systems for the “Iron Dome” that protects Israel from missiles launched by its enemies. The agreement provides for the potential production of air defense systems and components for Germany itself, as well as for other European countries.
Last week, VW’s supervisory board approved a radical plan to cut 50,000 jobs, with the possibility of halting new-car production at four German plants. The agreement on Osnabrück will be the most striking example of how Germany’s automotive sector—which is struggling due to competition from Chinese electric vehicles—is collaborating with the rapidly growing defense industry, notes the Financial Times.
In early 2025, Rheinmetall announced that it would repurpose two of its auto-parts plants to manufacture components for military equipment. Subsequently, its CEO, Armin Papperger, stated that the plant in Osnabrück—which was already slated for closure at the time—was “well-suited” for Rheinmetall’s operations, as the company needed to ramp up tank production.
At the same time, the German-French defense systems supplier KNDS acquired a railcar manufacturing plant in Germany, and the radar systems manufacturer Hensoldt decided to take on about 200 employees from Continental and Bosch.
Rafael is also seeking to capitalize on the advantages offered by Germany’s high-tech engineering sector. The company is in talks with the German government regarding the supply of “Iron Dome” systems, whose missiles have a range of 70 km.