Qatar Stakeholder Opposes Volkswagen-Rafael Deal, Raising Doubts Over Iron Dome Plant Plan

A Reuters report says a planned cooperation between Rafael and Volkswagen to produce Iron Dome components at Volkswagen’s plant in Osnabrück, Germany, may be at risk because of opposition from Qatar’s sovereign wealth fund, which owns 17% of Volkswagen. The controversy centers on Qatar’s objection to the partnership because of what the report describes as its "complex relationship with Israel."

The deal had been seen as a possible solution for the German automaker’s underused factory. European reports said several months ago that Rafael was preparing to buy the plant, which previously produced Volkswagen’s sporty models but has in recent years been reduced to making only one model, the Volkswagen T-Roc Cabrio, after demand for open-top mass-market cars fell.

Volkswagen then entered talks with Rafael about a collaboration to manufacture weapons systems at the site. In the latest report, however, the Qatari fund is said to have objected to the move. Volkswagen declined to comment on the report.

If the Rafael deal falls through, Volkswagen would be left with another factory producing niche, outdated models, and retraining its workforce for electric vehicle production would not be economically worthwhile. The report comes as several European automakers, including Renault and Volkswagen, have in recent months signaled interest in semi-military ventures amid Chinese carmakers’ growing share in Europe and European manufacturers’ difficulty in shifting quickly and profitably to electrification.