Volkswagen plans to sell the Osnabrück plant to the Israeli defense fund Aurelius

Volkswagen is withdrawing from the Osnabrück site. The plant, which was recently up for grabs as part of the group's realignment, will be used to produce military equipment in the future.

VW, the state of Lower Saxony and the Israeli investor Aurelius Capital have agreed on key points for a sale, according to a statement. After car production ends in 2027, the site will gradually be developed into a “competence center for security and defense solutions”.

Volkswagen decided in December 2024 to phase out production of the T-Roc convertible in the former Karmann factory in Osnabrück in the summer of 2027.

1,400 jobs are to be secured

The agreement is not yet a completed sale, but it does form the basis for the next steps. “This includes determining future responsibilities, the economic and organizational design and the preparation of the possible transition,” it said. Implementation is subject to final agreements, necessary committee resolutions and official review.

According to the plans, the Israeli fund Aurelius, which specializes in armaments projects, will take over the majority of the work, and the state of Lower Saxony will take over a minority. The details of the deal will be negotiated in the coming months, those involved explained. According to the works council, the solution now being implemented offers a future for almost 1,400 of the current total of 1,800 employees. This means that around three quarters of the workforce would be provided with a job prospect.

A direct sale was not possible due to the concerns of VW's major shareholder Qatar. The emirate has a special relationship with Israel because it also maintains contacts with the radical Islamist Hamas. Qatar is the third largest VW shareholder after the Porsche and Piech families and the state of Lower Saxony and has 17 percent of the voting rights.

Iron Dome air defense systems

The first project in the factory will be to produce air defense systems from the Israeli Iron Dome manufacturer Rafael. Iron Dome is a mobile, ground-based system designed to defend against short-range rockets and mortar shells. Rafael also produces the Iron Beam system, a laser weapon against airborne targets. In Germany, the Panzerfaust manufacturer Dynamit Nobel Defense is part of the Rafael Group.

"Germany and Europe must strengthen their skills and become more independent. Lower Saxony wants to contribute to creating added value and secure employment," said Lower Saxony's Prime Minister Olaf Lies.

Rafael boss Yoav Tourgeman said the goal was a long-term industrial partnership with the idea that the technology for protecting Germany and Europe would be produced entirely in Germany. The cooperation is intended to pave the way for further partnerships and projects under the umbrella of the new company.