Israeli missile firm to buy Volkswagen factory - report

Rafael Advanced Defence Systems, the company behind Israel’s Iron Dome missile system, will reportedly buy the Volkswagen plant in Osnabrück.

According to sources who spoke anonymously to Reuters, Rafael has signed a letter of intent regarding the purchase. Both companies have refused to comment on the matter, but at Volkswagen’s most recent earnings call on April 30 CEO Oliver Blume confirmed the automaker was in advanced discussions with defence companies regarding the factory.

It’s unknown how much Rafael will be paying for the factory, but an earlier report in the Financial Times indicated the Osnabrück site would be converted to make parts, , such as launchers, electricity generators, and the heavy trucks for transporting missiles, for the Iron Dome missile defence system.

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It would not, however, produce missiles. Missile production requires a specialised factory, and this will be done elsewhere in Germany.

Rafael is a defence firm owned by the Israeli government. It was founded as a military research and development lab in 1948. In the 1950s it was renamed to Rafael, a Hebrew acronym for Armament Development Authority. Rafael was turned into a state-owned for-profit company in the early 2000s.

The Israeli firm is reportedly hoping to sell the Iron Dome system to countries across Europe, which is busy rearming itself in the wake of Russia’s invasion of Ukraine in 2022. The idea of converting the Osnabrück plant is said to have the support of the German government, which has been busy encouraging outside investment to shore up its manufacturing base.

Iron Dome is a defensive missile system used to track and intercept short-range missiles launched from no more than 70km away. It was developed by Rafael and Israel Aerospace Industries, and has been deployed across Israel to protect the country from attacks originating from Gaza and Lebanon.

The Osnabrück factory was opened in 1874 to produce wagons, and was taken over by Karmann in 1901. As a contract manufacturing site, Karmann built cars for Mercedes-Benz, Nissan, Renault, Triumph, BMW and Volkswagen. When Karmann went bankrupt in 2010, Volkswagen took over the facility.

In 2014 Volkswagen reported the site had 2300 employees, but that number might be lower now as the plant only makes the T-Roc Cabriolet, production of which is set to end in 2027.

Since it became a Volkswagen factory, Osnabrück has also produced Golf Cabriolet, Porsche Boxster/Cayman, Skoda Karoq, and the MOIA autonomous people mover. It also made the hyper-efficient XL1 (above), and was responsible for final steps of production of the Arteon Shooting Brake.

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