Business & Markets
Volkswagen plant to make Rafael air defence equipment
Volkswagen said its Osnabrueck plant in northwest Germany will be sold and converted for defence production, with an initial air defence project planned for Israel’s Rafael Advanced Defence Systems after car production ends there.
The German carmaker said the site will be sold to Tel Aviv-based investor Aurelius Capital and the German state of Lower Saxony, a major Volkswagen shareholder. The sale price was not disclosed.
Volkswagen had already decided in 2024 to end vehicle production at Osnabrueck by 2027 as it cuts production capacity during weak demand, Chinese competition, US tariffs and uneven electric car sales.
Volkswagen’s works council said the deal would preserve at least 1,200 of the factory’s 1,800 jobs. Volkswagen CEO Oliver Blume said the agreement was an important step toward giving the site a new industrial future.
The project with Rafael will focus on the potential production of systems and components for air defence systems for Germany and Europe, Volkswagen said. Rafael president and CEO Yoav Tourgeman said the aim was for the technology to be fully produced in Germany.
The 125-year-old Osnabrueck site currently produces the Volkswagen T-Roc Cabriolet and the Porsche Cayman and Boxster.
The deal comes during a major restructuring at Volkswagen. Management and unions last week agreed to examine alternative uses for four other German factories and approved a further 50,000 job cuts, bringing planned losses across the group in the coming years to 100,000.
IG Metall union leader Christiane Benner, a Volkswagen supervisory board member, said the Osnabrueck agreement created opportunities but did not remove Volkswagen’s responsibility to find prospects for remaining employees.
The structure of the sale means Volkswagen is not directly selling the plant to Rafael. Qatar’s sovereign wealth fund is Volkswagen’s third-largest shareholder, with about 10 percent of equity, and Qatar does not recognise Israel.
The announcement is part of wider links between the auto and defence sectors. Mercedes-Benz said in June that it had a deal with drone maker Tytan Technologies to adapt some vans for mobile drone defence.
Update
Volkswagen and the buyers did not disclose the sale price for the Osnabrueck plant.
Rafael’s project will focus on potential manufacture of systems and components for air defence systems for Germany and Europe.
Rafael CEO Yoav Tourgeman said the aim was for the technology to be fully produced in Germany.
The Osnabrueck site currently produces the Volkswagen T-Roc Cabriolet and Porsche Cayman and Boxster models.
IG Metall leader Christiane Benner said Volkswagen still needed prospects for employees not covered by the deal.
Qatar’s sovereign wealth fund is Volkswagen’s third-largest shareholder with about 10 percent of equity, and Qatar does not recognise Israel.
Source note: AFP news report published on 7 September 2026 at 12:59:27 UTC.
Update
Volkswagen said it would sell the Osnabrueck plant to Tel Aviv-based Aurelius Capital and the German state of Lower Saxony.
Volkswagen said an initial air defence project was planned for Rafael Advanced Defence Systems.
Volkswagen's works council said the deal would preserve at least 1,200 jobs at the factory.
Volkswagen had already decided in 2024 to end vehicle production at the Osnabrueck site by 2027.
Volkswagen management and unions last week agreed to shed 50,000 more jobs across the group, taking planned job losses in coming years to 100,000.
Source note: AFP news report published on 7 September 2026 at 10:37:11 UTC.
Update
Volkswagen identified the plant as its Osnabrueck site.
Volkswagen said the site would make equipment for Israeli defence group Rafael.
Volkswagen said car production would end at the plant.
Volkswagen said it had reached an initial deal with the state government, an outside investor and Rafael over the site’s future.
Source note: AFP news report published on 7 September 2026 at 09:57:44 UTC.
Uncertainty notes
The sale price was not disclosed.
Volkswagen did not give further details on the Rafael air defence project.
The future of the Osnabrueck workers not covered by the job-preservation figure remains unclear.
The long-term future of four other German Volkswagen group factories remains uncertain.
Source
AFP news report published on .