Rafael Targets Volkswagen Osnabrueck Plant for Defence Shift

Conversion of Osnabrueck site gathers pace Israeli Company Rafael targets Volkswagen plant as defence shift gathers pace

2026-05-01 From Detlev Karg 1 min Reading Time

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Rafael Advanced Defence Systems has signed a letter of intent with Volkswagen AG to acquire the German automaker's plant ‌in Osnabrueck in northwestern ⁠Germany, people ⁠familiar with the matter said. Both VW, which announced sweeping plans to overhaul its struggling core car business on Thursday, and Israeli government-owned Rafael declined to comment, as several media 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))

Volkswagen previously said it wants to sell or reconfigure the site, which employs around 2,300 people, as part of a wider revamp, ⁠but ⁠has ruled out the production ⁠of weapons. The "Financial Times" reported in March that VW and Rafael were in ⁠talks to shift production at the plant from ⁠cars to missile defence. Rafael, one of the main ‌partners in Israel's Iron Dome, Arrow and David's Sling air and missile defence systems, would focus on building missile parts including motors rather than on explosives,which, for security reasons, would be built at a separate site, the sources said.

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. The defence ministry in Berlin ‌declined to comment. German defence group Rheinmetall had initially also expressed interest in the Osnabrück plant but has since withdrawn.

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