28.08.2026 19:52
German automotive giant Volkswagen and Israeli defense company Rafael Advanced Defense Systems are reportedly close to a deal for the production of military equipment at Volkswagen's Osnabrück plant. As talks reach their final stage, the facility is planned to produce launch pads for the Iron Dome air defense system and military truck components.
German automaker Volkswagen AG and Israeli defense industry company Rafael Advanced Defense Systems are reported to be close to an agreement for the production of military equipment at Volkswagen's Osnabrück plant.
NEGOTIATIONS IN FINAL STAGE
According to a report by the American Bloomberg news agency, citing sources familiar with the matter, negotiations for Israeli Rafael Advanced Defense Systems to take over Volkswagen's Osnabrück plant in Germany have reached the final stage.
The report stated that the parties could reach a formal agreement in the coming weeks, while noting that negotiations are still ongoing and a final partnership has not yet been finalized.
QATAR VETO EXPECTED TO BE OVERCOME WITH THE "LOWER SAXONY" FORMULA
At the facility in question, it is envisaged that components such as heavy-duty military trucks used to transport launch ramps and power generators for the air defense system "Iron Dome" developed by Rafael will be produced in the future.
This transformation, supported by the German federal government and the state of Lower Saxony, which holds a 20 percent stake in the company, has faced both Qatar's veto and protests from local residents and anti-war groups.
According to the report, an "indirect formula" option is also on the table to address Qatar's objections and the concerns of its sovereign wealth fund. Accordingly, Volkswagen would transfer certain parts of the Osnabrück facility to the state government of Lower Saxony. The state government would then establish a direct joint venture with Israeli Rafael. In this way, Volkswagen would avoid entering into direct cooperation with the Israeli company.
VOLKSWAGEN EXPERIENCES ONE OF THE DEEPEST CRISES IN ITS HISTORY
Volkswagen's Osnabrück plant, which employs approximately 2,300 people, currently produces Porsche's Cayman and Boxster models as well as the T-Roc Cabriolet.
The company, which is experiencing one of the deepest crises in its history due to layoff and plant closure plans following competition from Asia, has made no official statement on the matter.
The company's supervisory board will meet on September 4 to discuss the restructuring process, including the future of the Osnabrück plant.
Volkswagen CEO Oliver Blume, who faced workers for the first time on August 25 after plans emerged for an additional reduction of 50,000 jobs and the closure of 5 plants in Germany as part of radical cuts, signaled that they would not back down on restructuring.
While Blume seeks billions in savings due to high labor costs, plants operating below capacity, and intensifying Chinese competition, powerful German trade unions are fiercely opposing the plant closure plans.
TRANSITION TO DEFENSE INDUSTRY SEEN AS AN "ETHICAL TEST"
Volkswagen's plan to transition to the defense industry is considered a critical part of its strategy to offset losses in the passenger car division and preserve employment at a time when Europe is in the process of rearmament.
On the other hand, the fact that Volkswagen produced military vehicles for the Nazi regime during World War II and used forced labor makes the plant's return to military production historically controversial. Cooperation with Israel through this facility, amid Israel's attacks in Gaza, is also seen as a political and legal "ethical test" in Germany.