Key facts
- Volkswagen's Osnabrueck plant will be taken over by Aurelius Capital and Lower Saxony.
- The plant will be converted to defence production, potentially preserving 1,400 jobs.
- The deal comes as Volkswagen undergoes a major restructuring.
- An initial project involves cooperation with Israel's Rafael Advanced Defense Systems for air defence systems.
Volkswagen's Osnabrueck plant is slated for a significant transformation, with Israel's Aurelius Capital and the German state of Lower Saxony planning to take over the facility and reorient it towards defence production. This move is seen as a potential model for other Volkswagen sites facing uncertainty due to the automaker's extensive restructuring efforts, which aim to cut jobs and streamline operations amid weak demand and rising competition.
The agreement, outlined in a statement of intent signed by Aurelius Capital and Lower Saxony, aims to preserve approximately 1,400 of the plant's 1,800 jobs. Vehicle production at the Osnabrueck site is scheduled to conclude in 2027, making this transition crucial for its workforce.
Aurelius Capital, which focuses on areas including cybersecurity and drone technology, will reportedly take a majority stake in the plant, with Lower Saxony as a partner. The initiative highlights a growing trend in Europe where defence spending is being leveraged to utilize excess automotive manufacturing capacity. Companies like Rheinmetall and Continental are reportedly exploring similar ventures.
Volkswagen confirmed that an initial anchor project for the Osnabrueck facility will involve a collaboration with Israel's Rafael Advanced Defense Systems, a key developer of air and missile defence systems. This partnership could lead to the manufacture of components for air defence systems for both Germany and Europe, potentially opening doors for further defence-related collaborations.