Israeli defence contractor could acquire VW plant set to shut

The Israeli defence company Rafael is seeking to take over Volkswagen's Osnabrück plant, according to a conservative member of the German parliament with defence industry ties.

Bastian Ernst of Chancellor Friedrich Merz's Christian Democratic Union party told dpa on Thursday that "talks are under way between Rafael and Volkswagen." 

Ernst served in a senior role at anti-tank rocket manufacturer Dynamit Nobel Defence (DND) until last year, when he became a lawmaker in parliament. 

DND, Rafael’s German subsidiary, is also expected to take over the Volkswagen site under current plans, according to sources, which was also reported by the Neue Osnabrücker Zeitung.

The Osnabrück plant is not expected to produce anti-tank rockets but rather components for the Iron Dome air defence system, which Rafael manufactures in Israel. Ernst speculated that these could include heavy trucks and launch systems. 

DND did not respond to a request for comment. Volkswagen said it was continuing to examine viable prospects for the Osnabrück site after current production ends in 2027, and that it was "in talks with various market players."

Tank and ammunition manufacturer Rheinmetall had initially expressed interest in the site but later withdrew. 

Ernst thinks a Rafael and DND takeover of the VW site is a good idea.

"This is a win-win situation," the politician said. "We would have Israeli know-how in Germany and the Israeli state-owned company would have a production facility that is not threatened by war." He also said it was good that at least some of the Osnabrück workforce could be retained.