Volkswagen plant in Osnabrück to be repurposed for defense production

Converting the automotive plant to defense production will be the first such case in modern Germany. Volkswagen Group says that the sale of the site to Aurelius will make it possible to preserve the jobs of 1,400 of the 1,800 employees.

The key production partner of the new enterprise will be Israel's Rafael Advanced Defense Systems, known as the manufacturer of the Iron Dome air defense system. It is expected that the focus will be on producing components for air defense systems. Rafael CEO Yoav Turgeman said the parties are counting on a long-term partnership and a full production cycle of technologies in Germany to protect Germany and Europe.

The signed agreement makes it possible to allocate future responsibilities, form an economic and organizational structure, and begin repurposing the plant. The deal still has to be approved by Volkswagen's board of directors and regulatory authorities.

According to Bloomberg, in July the Qatari sovereign wealth fund, which owns 17% of the voting shares of Volkswagen Group, blocked the creation of a joint venture with Rafael in Osnabrück. This veto was circumvented through a scheme in which, alongside Aurelius, the main shareholder will be the government of Lower Saxony, which will make it possible to avoid a direct partnership between Volkswagen and Rafael.

The Osnabrück site previously belonged to the automotive body manufacturer Karmann. Since 1949, it produced, among other things, the Beetle convertible there, and in 2009 Karmann went bankrupt and Volkswagen bought the plant.

Sources

• Material: theins.ru