Qatar’s sovereign wealth fund is delaying a strategic joint project between Volkswagen and Rafael to manufacture components for Iron Dome systems in Osnabrück, Lower Saxony, according to New Arab, citing Reuters. Qatar has influence over Volkswagen because its fund holds 17% of the carmaker, and Doha is objecting on the basis of its relationship with Israel.
The delay complicates Volkswagen’s plan to exit loss-making factories by shifting capacity toward defense industry work, which is seeing rising demand. Volkswagen and Rafael signed a memorandum of understanding in April to make parts in Germany for the Israeli air defense system. Rafael wants the partnership to expand production capacity, streamline supply chains, and deepen its footprint in Europe.
Olaf Lies, the Lower Saxony premier and a Volkswagen board member, called for a long-term solution for the plant, which employs about 2,300 people. He told Reuters, “I expect the company to live up to this responsibility and implement the announced decisions on time.” He added, “We will provide constructive support wherever appropriate and possible.”
The report says the plant’s future is difficult to reconcile with Qatar’s pan-Arab and pan-Islamic image, making approval of the deal politically sensitive for Doha.
