Rafael to Produce Iron Dome Components at German Volkswagen Plant

Israeli defense firm Rafael Advanced Defense Systems is set to begin manufacturing components for its Iron Dome missile defense system at a Volkswagen plant in Osnabrück, Germany, starting in 2027, according to a report by Globes, citing the German magazine WirtschaftsWoche. The facility currently employs approximately 2,300 people.

Volkswagen will reportedly sell the plant to a consortium that includes the German state of Lower Saxony, the Munich-based investment firm Aurelius Capital, and Rafael. Volkswagen itself will not be involved in the project after the sale. The plant is slated to produce components such as truck platforms, generators, and launchers for the Iron Dome system, though the interceptor missiles themselves will not be manufactured there.

Months of non-public negotiations preceded this development, with Rafael submitting a formal offer to acquire the plant's production operations. The Prime Minister of Lower Saxony, Olaf Lies, is expected to officially announce the new ownership structure and the factory's future on September 7. It is anticipated that current jobs will be preserved.

The Osnabrück plant currently produces Volkswagen T-Roc convertibles, but this production is scheduled to conclude in the first half of 2027. Volkswagen had previously confirmed in the summer that it was seeking new prospects for the facility and was in discussions with defense industry companies, with Rafael identified as a potential partner.

According to Globes, this acquisition structure may circumvent objections from a Qatari investment fund that holds approximately 10% of Volkswagen's shares and about 17% of its voting rights. Lower Saxony has previously been reported to be considering an investment of around 200 million euros in the deal, though the total project cost remains undisclosed.