Volkswagen to sell Osnabrück plant for defense production with Israeli firm Rafael

Volkswagen agreed on Monday to sell its Osnabrück plant in Lower Saxony to the state government and Israeli investment firm Aurelius Capital, with plans to repurpose the site for defense production starting in mid-2027. The facility, which currently employs around 1,800 workers, will shift from car manufacturing to producing systems and components for air defense systems under a partnership with Rafael Advanced Defense Systems, the Israeli state-owned firm behind the Iron Dome missile defense system .
The deal, described as a preliminary agreement, aims to preserve nearly 1,400 jobs at the plant, according to Volkswagen’s works council. Aurelius Capital will serve as the majority owner, while Lower Saxony’s government will co-invest in transforming the site into a “competence center for innovative security and defense solutions,” as stated by regional officials .
Volkswagen CEO Oliver Blume called the agreement “an important step toward opening up a new industrial future for the site,” part of broader restructuring efforts as the company phases out vehicle production at Osnabrück by summer 2027. The automaker had previously announced plans to close four German plants in the 2030s amid weak demand and competition from Chinese electric vehicle manufacturers .
Rafael’s involvement follows earlier reports that direct negotiations between Volkswagen and the Israeli defense firm were blocked by a veto from Qatar’s sovereign wealth fund, a major Volkswagen shareholder, due to Rafael’s role in Israel’s defense industry. The current structure, with Aurelius as the formal buyer, circumvents that obstacle .
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