As production winds down, VW’s Osnabrück plant could become a defense hub

Volkswagen’s Osnabrück plant is being lined up for a new life in defense production as car manufacturing at the site approaches its planned end in 2027. Volkswagen, the state of Lower Saxony and investor Aurelius Capital have agreed on key terms for a possible sale.

Under the plan, Aurelius would become the majority owner of Volkswagen Osnabrück GmbH alongside Lower Saxony. The site would gradually be developed into a competence center for security and defense solutions, with the stated aim of securing its long-term future.

The works council said the proposed arrangement could give nearly 1,400 of the plant’s 1,800 employees a future at the site. That would provide an employment outlook for roughly three-quarters of the current workforce.

The first anchor project would involve Rafael, the Israeli defense company known for the Iron Dome air-defense system. Rafael also produces Iron Beam, a laser weapon designed to engage airborne targets, and Trophy, an active protection system used on Germany’s Leopard battle tank. The planned cooperation would initially examine the development and production of air-defense components.

Rafael chief executive Joav Tourgeman said, "Today we build a long-term industrial partnership with our German partners with the goal that the technology will be produced entirely in Germany to protect Germany and Europe." Volkswagen said Osnabrück employees would play a central role in establishing production and industrial processes. The agreement does not complete the sale. Further arrangements, corporate approvals and regulatory review remain necessary.

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Today we build a long-term industrial partnership with our German partners with the goal that the technology will be produced entirely in Germany to protect Germany and Europe.