Volkswagen wants to focus on producing parts for air defense.

Volkswagen in Talks to Enter Military Manufacturing

Volkswagen, the German automotive manufacturer currently facing a crisis, is reportedly in negotiations with the Israeli defense contractor Rafael Advanced Defense Systems, the maker of the “Iron Dome,” as reported by the Financial Times on Tuesday, March 24th. The discussions are said to involve the Osnabrück plant near Dortmund. A Volkswagen spokesperson stated that the company is in talks with “various market players,” but there is currently “no specific decision or conclusion regarding the future direction” of the site.

Sources close to the matter suggest that the plant would produce components for the “Iron Dome” air defense system, such as heavy trucks transporting missiles, launchers, and electric generators. However, it would not manufacture the projectiles themselves. Production could be operational within 12 to 18 months, provided that workers agree to retrain for weapon production.

“The goal is to save everyone.” Volkswagen has been hit hard by Chinese competition and American tariffs. In mid-March, it announced the elimination of 50,000 jobs by 2030 after a 53% drop in its operating result in 2025. This move could potentially save the jobs at the plant, which is slated to close in 2027: “The goal is to save everyone, even to create growth. (…) The potential is immense,” stated an individual familiar with the project. The German government is said to support this initiative, being one of Israel’s strongest supporters in Europe.

Weapon manufacturing is not new territory for Volkswagen, which produces military trucks through a joint venture between its subsidiary MAN and the German defense group Rheinmetall. However, Volkswagen’s most recent military weapons (V1 flying bomb, military vehicles) date back to World War II.