Volkswagen plant to be converted for Israeli defence group

FRANKFURT

A logo of German carmaker Volkswagen (VW) is pictured behind a red traffic light at the Volkswagen plant in Osnabruck, Germany, on Nov 6, 2024. (AFP Photo)

Crisis-wracked German auto giant Volkswagen has said one of its plants would be sold off and converted to make defense equipment after car production ends there.

It is part of a sweeping overhaul at Europe’s top carmaker, which is already pushing through the biggest job-cutting drive in global auto industry history as it battles Chinese competition, U.S. tariffs and patchy electric car sales.

The announcement is also the latest tie-up between Germany’s ailing auto industry and the defense sector, which is booming as countries build up their militaries to face an increasingly dangerous world.

VW’s Osnabrueck plant, in northwest Germany, is to be sold to Tel Aviv-based investors Aurelius Capital and the German state of Lower Saxony, a major VW shareholder, with an initial air defense project planned for the Israeli firm Rafael Advanced Defense Systems.

They did not disclose the sale price.

The project with Rafael will focus on the potential manufacture of systems and components for air defense systems for Germany and Europe, the carmaker said, without giving further details.

The Osnabrueck site, which dates back 125 years, currently produces the Volkswagen T-Roc Cabriolet as well as the Cayman and Boxster for its sister brand Porsche.

The announcement is the latest tie-up between the automobile and defense sectors. Mercedes-Benz said in June that it had a deal with drone maker Tytan Technologies to adapt some of its vans for mobile drone defense.

Mercedes has also reportedly held talks with French-German tank and weapons maker KNDS about potentially building armoured personnel carriers at a Mercedes plant.