VW's Osnabrück plant in Germany to partner with Israel's Rafael

Volkswagen's plant in the western German city of Osnabrück is to be converted into an expertise centre for security and defence, the carmaker, the state of Lower Saxony and investor Aurelius Capital announced after agreeing terms.

Car production is to cease in 2027.

Aurelius, as majority owner together with the state of Lower Saxony, which holds a large stake in VW, is to take over running the plant, with the aim of keeping the site open for the long term.

According to the works council, the deal will provide jobs for nearly 1,400 of the 1,800 employees.

The first major project is expected to be a partnership with Israel's Rafael, which produces air-defence systems, guided missiles, and electronic warfare systems and is known for its "Iron Dome," which protects Israeli airspace.

Rafael chief executive Joav Tourgeman said: "Today we are building a long-term industrial partnership with our German partners, with the aim of having the technology fully produced in Germany to protect Germany and Europe."

According to VW, the workforce in Osnabrück will play a central role in establishing manufacturing and industrial-scale production.

The agreement is not yet a completed sale, but is intended to provide a basis for subsequent steps, including defining responsibilities, determining the structure and preparing for the transition.

Rafael also produces "Iron Beam," a laser weapon designed to engage targets in the air. It also supplies the Trophy active protection system, which can destroy incoming missiles and anti-tank weapons and is installed on Germany's Leopard main battle tank.