Volkswagen has confirmed an agreement to save one of its main factories from closing by agreeing to sell the plant to an Israeli weapons manufacturer.
The German manufacturing giant recently confirmed that its advisory board had approved its Future Plan 2030 to protect the long-term sustainability of the automaker.
As part of this, Volkswagen will axe tens of thousands of jobs, potentially close four factories and slash the number of product releases over the coming years.
One of Volkswagen’s first actions has been to sign an agreement with the State of Lower Saxony and Aurelius Capital to sell its Osnabrück factory.
The factory will be gradually developed into a competence centre for security and defence solutions, with hopes that the majority of jobs will be retained in the long term.
Aurelius and Rafael Advanced Defence Systems are planning an initial anchor project focusing on air defence.
Aurelius markets itself as having a “conviction-driven portfolio backing companies at the frontier of defence, intelligence, and critical infrastructure technology”.
It mainly focuses on cybersecurity, drone and satellite technology, autonomous manufacturing and communications.
Volkswagen initially decided in 2024 to phase out production at the Osnabrück site in summer 2027, with the factory now transitioning to producing missile-system parts.
Oliver Blume, CEO of the Volkswagen Group, said: “Volkswagen stands by its responsibility for Osnabrück. With today’s agreement, we are taking an important step towards opening up a new industrial future for the site.
“Time and again, the employees in Osnabrück have demonstrated just how much expertise, flexibility and commitment this plant has to offer. The site can build on these strengths in the future as well.”
The Osnabrück factory was previously used to produce the iconic Karmann-Ghia, before making the VW Golf VI Cabrio after Karmann went bankrupt in 2010.
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Aurelius will cooperate with Rafael Advanced Defence Systems to “play a central role in establishing manufacturing operations and industrialising production”.
Rafael’s technology is used in Israel’s Iron Dome systems, which aim to detect incoming missiles and destroy them before making contact.
Reports state that the Osnabrück site will not manufacture Tamir missiles, which are also used in the Iron Dome system.
Rafael claims that the Iron Dome has made over 10,000 successful interceptions over the last 15 years with a more than 90 per cent success rate.
Demonstrations were launched in Osnabrück when talks were ongoing between Volkswagen and Aurelius, with hundreds of people marching through the city, demanding that VW refuse access to its facilities.
Protesters held signs highlighting the plight of Palestinians, calling for peace and urging Volkswagen to reject selling the Osnabrück plant.
Tomer Jacob, managing director of Aurelius, added: “Osnabrück brings with it something that cannot be built from scratch: many years of experience with demanding products, precise manufacturing processes and high quality, well-coordinated teams, and a strong tradition.
“At the same time, there is an opportunity to bring new technologies and new business fields to the site. That is why today’s agreement is an important step. We now want to work together to develop this into a viable, long-term perspective.”
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