Volkswagen sells its Osnabrück plant in Germany and converts it into a defense facility

Volkswagen Group, an automobile company that has begun a major restructuring, has decided to sell one German factory and convert it into a military supplies production facility.

According to the business magazine Handelsblatt, the Volkswagen Group announced on the 7th (local time) that the Israeli investment company Aurelius Capital and the government of Lower Saxony, the group's second largest shareholder, have agreed to acquire the Osnabrück plant and use it as a 'security and defense center'.

Local media reported that Aurelius is planning its first project at this factory with Rafael Advanced Defense Systems (Raphael), an Israeli state-owned company that produces the Iron Dome air defense system.

There have been rumors for a while that Volkswagen would hand over its Osnabrück plant to a defense company. Volkswagen approached Rafael about an acquisition, but the group's third-largest shareholder, Qatar Investment Authority (QIA), opposed it. The joint acquisition by an Israeli investment company and the German state government is interpreted as a measure to circumvent Qatar's opposition.

The union agreed to the sale of the Osnabrück plant on the condition that it maintain the jobs of about 1,400 of the 1,800 employees until 2029 and make efforts to guarantee employment for the remaining employees.

Volkswagen assembles the T-Roc Cabriolet model at its Osnabrück plant, but reached an agreement with unions in 2024 to stop producing cars there next year. The Dresden factory, which was also decided to suspend production at the time, is being rented by the Dresden University of Technology to create an artificial intelligence (AI) and robotics research campus.

Volkswagen management submitted a restructuring plan to the supervisory board, which includes the Lower Saxony government and labor representatives, to lay off an additional 50,000 people to the previously agreed upon 50,000 and find new ways to utilize the plants in Emden, Zwickau, Hanover, and Neckarsulm, and it was approved on the 3rd.