Volkswagen has reached an agreement on the future of its Osnabrück plant in Germany and plans to transfer the facility to Israeli private equity firm Aurelius and the state of Lower Saxony. Under the agreement, Aurelius will acquire the majority stake, while the state of Lower Saxony will take a minority stake.
At the center of the transfer plan is a proposed partnership with Rafael Advanced Defense Systems, an Israel-based manufacturer of air defense systems. The plant is planned to produce air defense systems and their components for the German and European markets.
Defense production plan for Osnabrück
Aurelius and the state of Lower Saxony aim to transform the facility into a center of expertise for security and defense solutions in the coming years. The planned cooperation with Rafael will also lay the foundation for new partnerships and projects in the future.
Details of the agreement are expected to be negotiated in the coming months. Two years ago, Volkswagen decided to gradually end vehicle production at the Osnabrück plant by the summer of 2027.
Criticism grows in Germany
Volkswagen Chief Executive Oliver Blume said in a statement in March that production of Volkswagen Group vehicles in Osnabrück would be halted from 2027. Blume also said that talks were being held with defense companies about converting the plant to produce military vehicles.
The plan drew opposition from Volkswagen employees, peace activists and opposition parties. Critics argued that the plant should focus exclusively on civilian production.
The Osnabrück Peace Initiative organized several protests demanding that Volkswagen abandon defense contracts. Germany’s Left Party described the planned cooperation with Rafael as unacceptable, citing its allegations of war crimes and genocide against Netanyahu’s government.
Rafael is expanding its activities across Europe at a time when governments throughout the continent are increasing defense spending and procurement.