Rafael Targets Volkswagen Osnabrueck Plant for Defence Shift

Plans for the VW plant in Osnabrück are taking shape Israeli Company Rafael Targets Volkswagen Plant as Defence Shift Gathers Pace

2026-05-14 From Detlev Karg 2 min Reading Time

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The Volkswagen plant in Osnabrück could in future potentially be converted to the production of military vehicles. German business magazine Wirtschaftswoche reports that a takeover of the plant by the Israeli defence company Rafael Advanced Defense Systems was moving closer. The Israelis are said to be planning to manufacture carrier vehicles for the Iron Dome air defence system there as part of Europe’s wider air defence architecture, the magazine reported.

An Iron Dome air defence launcher fires an interceptor missile during operations in 2021.(Photo: IDF Spokesperson’s Unit, Wiki Commons (CC BY-SA 3.0)) — An Iron Dome air defence launcher fires an interceptor missile during operations in 2021.
(Photo: IDF Spokesperson’s Unit, Wiki Commons (CC BY-SA 3.0))

Sources familiar with the matter confirmed that a written agreement was in place, Wirtschaftswoche further reported. A joint venture between Rafael Advanced Defense Systems and Volkswagen is expected to be established by the end of the year. According to sources close to the ongoing negotiations, the cooperation would focus on the joint production “from the chassis through to vehicle components for platforms capable of transporting combat systems”.

Production for the European missile defence shield

Sources familiar with the matter confirmed that a written agreement was in place, Wirtschaftswoche further reported. Under the plans, the missiles and air defence systems would be manufactured in Israel before being mounted in Osnabrück onto military vehicles produced in Germany. The products would reportedly not be intended for Israel’s domestic Iron Dome network, but rather as part of Europe’s wider air defence architecture. The framework for the project would be the German-led European Sky Shield Initiative (ESSI), whose member states - ranging from Albania to the United Kingdom - are expected to procure the systems. Deliveries to Scandinavia are also reportedly being considered. Volkswagen itself would not manufacture weapons, the company said. It also remains unclear how many of the plant’s current 2,300 employees could ultimately be retained.

Win-win situation for both sides

The switch from auto components would reflect German industry's growing focus on defence as the government in Berlin has set aside hundreds of billions of euros to rebuild the military after decades of neglect. People familiar with the ‌issue said the German government wanted to ensure it retained overall control over defence technology projects in Germany and that the technology remained in Germany. The move would provide Israel with production capacity outside the immediate theatre of conflict. For defence companies, partnerships with automakers offer a base of industrial expertise, with skilled workforces as well as plant adapted to engineering and metal work that offers production at a scale greater than the specialised ‌facilities they typically work ‌with.

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