Sale of the VW Osnabrück plant: air defense instead of convertibles

The state of Lower Saxony, the investment firm Aurelius Capital from Tel Aviv and the Israeli defense company Rafael Advanced Defense Systems (known for its “Iron Dome” missile defense system) announced on Monday that they wanted to take over the VW factory in Osnabrück. In the future, systems and components for air defense systems will be manufactured here.

Plans of this kind have been talked about in Osnabrück for a long time - at least since VW decided to phase out vehicle production here in 2024. The last T-Roc Cabriolet is scheduled to be manufactured in 2027. Almost 2,000 employees would be affected.

What is new, however, is the structure that the plant will have as a “competence center for security and defense solutions,” as a press release from the Volkswagen Group puts it. Initially there was talk of cooperation or joint ventures at VW.

After the Israeli company emerged as the most promising and serious interested party, according to consistent media reports, the Qatari sovereign wealth fund, which holds 17 percent of the voting rights in VW, lodged an objection.

Volkswagen Osnabrück GmbH is now to be sold to Aurelius Capital as the majority owner, with the state of Lower Saxony wanting and wanting to act as co-owner. It is still unclear how high the financial obligations are that Lower Saxony is making.

Aurelius Capital acts primarily as a capital raiser. The international investment company says it specializes in the areas of defense, cybersecurity, artificial intelligence and critical infrastructure.

The collaboration with the Israeli defense company Rafael Advanced Defense Systems, on the other hand, is described in the press releases as the “first anchor project”, which is to be followed by further industrial partnerships and projects.

It is not the first engagement in Germany, the company - originally created from a department of the Israeli military - already works as an outfitter for the Bundeswehr, has a subsidiary in Burbach in North Rhine-Westphalia and cooperates in the EuroSpike joint venture with the German defense companies Diehl Defense and Rheinmetall.

However, the approach in Osnabrück is not necessarily suitable as a blueprint for the other VW locations that are currently being discussed. The location is particularly suitable as a weapons forge because the former Karmann factory was always designed for special production, small series and prototype construction. Arms production is more precision craftsmanship than mass production.

In the “City of Peace” Osnabrück, the news was received primarily with relief: the works council of the plant emphasized that employment guarantees and collective agreements should be adopted. With the desired solution, three-quarters of the workforce would have concrete job prospects.

Peace activists and environmentalists who have joined forces in the “Osnabrück Future Workshop” are less enthusiastic: a socio-ecological production change has unfortunately been missed, according to a press release from the alliance.

However, the sale is not yet complete: those involved have signed a declaration of intent. The Lower Saxony State Chancellery says we are now moving into the next phase with detailed negotiations, assessments of regulatory requirements and the necessary internal decision-making processes.