Volkswagen is set to sell its Osnabrück plant in Germany for conversion into a facility producing equipment for Israeli defence company Rafael Advanced Defense Systems, as vehicle production at the site is wound down.
The 125-year-old factory in north-west Germany is expected to stop making vehicles in 2027, when production of the T-Roc Cabriolet ends.
The plant currently employs about 2,300 people.
Volkswagen said the site would produce components for European air defence systems, while Rafael chief executive Yoav Tourgeman said the aim was “to protect Germany and Europe”.
Bloomberg reported last month that plans for the facility included the production of missile transporters, launchers and power generators for Israel’s Iron Dome air defence system.
Iron Dome is designed to intercept short-range rockets, artillery shells, mortars and drones at ranges of up to 43 miles.
The system detects incoming projectiles and launches interceptors against those it calculates are heading towards populated areas.
The agreement will not include production of the Tamir interceptor missiles used by Iron Dome, according to an Israeli newspaper.
The newspaper reported that the arrangement could also pave the way for Germany to order the complete missile defence system to help counter potential threats from Russia.
Germany has already committed billions of dollars to Israeli missile technology.
Berlin signed a $3.5 billion contract for the Arrow 3 long-range missile system in 2023, then agreed to a further $3.1 billion purchase.
Under the deal, Israeli private equity firm Aurelius Capital will become the majority owner of the Osnabrück site alongside the government of Lower Saxony, where Volkswagen is headquartered.
The sale comes as Europe’s largest carmaker restructures its operations amid weaker sales and competition from cheaper Chinese vehicles.
The company is also considering alternative uses for four other German plants as it seeks to avoid outright closures.
