Israel's Rafael to Produce Iron Dome Components in Germany

Israeli defense contractor Rafael is set to begin producing components for the Iron Dome missile defense system in Germany starting next year. The agreement involves the acquisition of a Volkswagen factory in Osnabrück, Lower Saxony, which is currently slated to cease its automotive production in mid-2027. This move marks a significant entry of the Israeli defense industry into the heart of German manufacturing.

The deal, which has been under secret negotiation for months, will see Rafael join a consortium that includes the state of Lower Saxony and a Bavarian investment fund. Volkswagen itself will not be directly involved in the defense production, as the factory's sale is part of a broader restructuring plan that includes significant layoffs and plant closures across Germany. The Osnabrück plant currently employs around 2,300 workers, and assurances have been made that no jobs will be lost as a result of this transition.

Lower Saxony's Minister-President, Stephan Weil, is expected to announce the new partnership and the factory's future direction soon. This announcement is politically significant, coming shortly before local elections in the state. The arrangement circumvents potential opposition from Qatar's Investment Fund, a major shareholder in Volkswagen, which had previously expressed strong objections to the defense production plans.

The Osnabrück facility, which has a history dating back to the 19th century, will shift from producing convertible car models to manufacturing components for the Iron Dome system, such as trucks, generators, and launch rails. The interceptors themselves will not be produced at the site. While the exact financial terms are not fully disclosed, the state of Lower Saxony was previously mentioned as potentially contributing around 200 million euros.