Volkswagen has agreed to sell its Osnabrück plant in Germany and gradually transform it from a car manufacturing facility into a defense technology center, with Israeli weapons manufacturer Rafael Advanced Defense Systems expected to become its first major partner.
Volkswagen announced on September 7 that it had reached an agreement in principle with the state of Lower Saxony and Israeli investment firm Aurelius Capital on the key terms of the planned sale of its Osnabrück plant.
Under the proposed deal, Aurelius would become the majority shareholder in the facility, while Lower Saxony would also hold a stake.
The plant will gradually shift away from vehicle production toward what Volkswagen describes as a “technology center for security and defense solutions.”
The first major project is expected to involve cooperation with Rafael Advanced Defense Systems to manufacture air-defense equipment for Germany and other European customers.
Rafael, an Israeli state-owned defense company, is best known for developing systems including the Iron Dome, which is designed to intercept incoming rockets and missiles. Israeli media reports indicate that the Osnabrück facility could eventually produce military vehicles, missile launchers and other defense equipment, although Tamir interceptor missiles used by the Iron Dome system are not expected to be manufactured there.
Plant has military history
The Osnabrück plant has a history linked to military production during Nazi Germany. In its early years, the facility produced aircraft components used by Germany during World War II.
Volkswagen took over operations at the plant in 2009. In 2024, the company announced plans to end vehicle production at Osnabrück by the summer of 2027.
The proposed conversion into a defense facility is expected to preserve more than 1,200 jobs, according to the plans.
Volkswagen Group CEO Oliver Blume said the agreement would help prepare the facility for the future and support the development of advanced industrial capabilities.
The planned transformation comes as Germany and other European countries increase defense spending and seek to expand domestic production of military equipment amid growing security concerns across Europe.
