Israel's Rafael to Produce Iron Dome Components in Germany

Israeli defense firm Rafael is set to begin manufacturing components for the Iron Dome missile defense system in Germany starting next year. The production will take place at a factory in Osnabrück currently owned by Volkswagen, according to a report in the German magazine Wirtschaftswoche. This marks a significant step for Israel's defense industry, integrating into Germany's industrial heartland and potentially saving thousands of jobs.

Volkswagen itself will not be directly involved in the defense production. The factory will be sold to a consortium that includes the state of Lower Saxony and a Bavarian investment fund. Volkswagen's sale of the plant is part of a broader restructuring plan in Germany, which includes layoffs and the closure of other facilities, as the company focuses on its core assets. The Osnabrück plant, currently producing T-ROC convertible models, is scheduled to cease that operation in mid-2027.

Behind-the-scenes negotiations reportedly saw Rafael submit a written offer to acquire the facility for producing Iron Dome components, such as trucks, generators, and launch rails. The interceptors themselves will not be manufactured there. The deal faced opposition from Qatar Investment Authority, a major shareholder in Volkswagen, which holds 10% of the company's shares and 17% of its voting rights. The current solution involves the state of Lower Saxony and Munich-based investment firm Aurelius Capital purchasing the plant, alongside the Israeli state-owned company.

Lower Saxony's state governor, Stephan Weil, is expected to announce the new partnership and the factory's new direction on Monday, emphasizing that "no jobs will be lost." This announcement is politically significant, coming shortly before local elections in Lower Saxony. While the German federal government was initially considered for involvement, it will not participate in the final deal. The total sum for the consortium's purchase is unclear, though previous reports suggested the state of Lower Saxony might contribute around 200 million euros. The Osnabrück factory, which currently employs about 2,300 people, has a history dating back to the 19th century.