Volkswagen and Rafael Advanced Defense Systems plan to transform the plant in Osnabrück, at risk of closure, into a factory of components for the Iron Dome air defense system, owned by the Israeli state-owned company, sources say to the Financial Times.
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German car industry profits have plummeted amid growing competition from China and a slow shift to electric vehicles. VW seeks partnership with the dynamically developing defense sector.
The two companies hope to save all 2,300 jobs at the Lower Saxony plant, which is at risk of closure, and sell the systems to European governments.
“The goal is to save everyone and maybe even develop it,” one source said.
According to another person, the German government actively supports this proposal.
Volkswagen already produces military trucks as part of a joint venture between subsidiary MAN and German arms company Rheinmetall.
However, a partnership with Rafael would mean a significant return to arms production for VW. VW produced military vehicles and the V1 flying bomb for Hitler's Wehrmacht during World War II.
According to the plans, the Osnabrück plant would produce various parts of the Iron Dome system, including heavy trucks carrying missiles, as well as launchers and power generators. However, it would not produce the missiles themselves.
According to the person behind the concept, it would require minimal new investment. “Some funding is needed to transition to new production, but it's quite simple.”
Production could start within 12 to 18 months, another person said.
Rafael plans to set up a separate production facility in Germany for the missiles, which must be handled in a specialized facility.
The company hopes to sell the Iron Dome system to governments across Europe, including Germany, as countries beef up their air defenses as part of a broad rearmament in response to Russia's full-scale invasion of Ukraine. Last year, Germany took delivery of the first of three batteries of Israel's Arrow 3 air defense system, manufactured by another Israeli company, Israel Aerospace Industries.
Source: Financial Times
