OREANDA-NEWS The Volkswagen plant in Osnabrück will be repurposed for the production of air defense systems. Volkswagen has begun a large-scale production optimization, which will lay off tens of thousands of employees and eliminate about half of the models produced. Four plants are facing shutdown, and another one is planned to be sold to a third-party buyer.

The German carmaker confirmed the approval of preliminary agreements on the sale of the enterprise in Osnabrück, where the T-Roc convertible is assembled. In the spring of 2024, approximately 2,300 people worked at this site.

The agreement of the deal took place between the manufacturer, the investment group Aurelius Capital and the authorities of the federal state of Lower Saxony. Under the terms of the agreement, Aurelius Capital will receive a controlling stake, but the regional government will also retain a portion of the shares.

After Volkswagen completes production of cars at the Osnabrück plant in the summer of 2027, the company will be redesigned for the production of defense products. The work will be carried out jointly with the Israeli company Rafael Advanced Defense Systems, and the plant will focus on manufacturing equipment and components for air defense systems to be used in Germany and other countries.

The final entry into force of the transaction requires obtaining permits and approval from regulatory authorities. Certain difficulties may arise due to the fact that both companies - Aurelius Capital and Rafael Advanced Defense Systems — are of Israeli origin. The latter is primarily known as the developer of the Iron Dome, Arrow and David Sling anti-missile and anti-aircraft systems.

The head of Volkswagen Group, Oliver Blume, is convinced that the agreement reached opens up a new industrial perspective for the plant.