Volkswagen Factory Could Stop Building Cars to Make Iron Dome Systems for Israel

Key Points

• Volkswagen may partner with Israel's Rafael to convert the Osnabrück plant for defense production.
• The plan aims to save 2,300 jobs by shifting from vehicles to Iron Dome components.
• Volkswagen spokesperson said, “The production of weapons by Volkswagen AG remains ruled out for the future.”

A Bold Report

A recent story from the Financial Times has stirred up rather interesting headlines for the last few days. It was said that Volkswagen is considering a deal with an Israeli defense company to build components for the Iron Dome. Europe’s largest automaker is allegedly in talks with Rafael Advanced Defense Systems.

Rafael Advanced Defense Systems is a state-owned company that was founded as Israel’s National R&D Defense Laboratory. The report claims several people close to the matter have come forward, and the reason for this move is to help save jobs in Germany and to raise much-needed cash flow.

According to the original source, the two companies are eyeing Volkswagen’s Osnabrück assembly line in Lower Saxony. Currently, the plant is at risk of shutting down as the vehicles it produces will be discontinued by 2027. The cars produced there at the time of writing are the Volkswagen T-Roc Cabriolet, as well as the Porsche Cayman and Boxster.

Per Volkswagen, there are 2,300 jobs at that facility, and the plan is to keep all personnel on site and preserve those jobs. Should the supposed plan push through, the plant will be converted from vehicle production to air defense manufacturing.

One thing to note here is that Volkswagen’s plant will not be used to assemble missiles. Per Automotive News, it will be for vehicles used to transport artillery, as well as power systems for the Iron Dome. The same report also said that everything built there will also be offered to other European nations.

Back to the Financial Times report, the move is supported by the German government. Once approved, the transition from automobile to defense production could be accomplished within 12 to 18 months.

From the Spokesperson

German broadcaster Deutsche Welle has reached out to Volkswagen regarding the matter. A spokesperson said: “The production of weapons by Volkswagen AG remains ruled out for the future, and we do not engage in speculation regarding further plans for the Osnabrück site.”

The spokesperson also mentioned that the company is exploring options to keep the plant running, but did not mention specifics. It remains unknown if the facility will continue building civilian vehicles or become a fully-fledged military facility. Mind you, the deal, if true, isn’t set in stone yet.

“The Volkswagen plant in Osnabrück has developed various vehicle concepts in recent months to explore potential market opportunities and prospects. Whether and to what extent these will result in concrete projects remains to be seen,” added the spokesperson.