Volkswagen plant in Germany may be repurposed for defense orders

The future of the German automaker Volkswagen's plant in Osnabrück, in the federal state of Lower Saxony, is planned to be linked to defense orders.

Volkswagen, the government of Lower Saxony, and the investment company Aurelius Capital have agreed on the main terms of the corresponding deal.

This was reported by DPA.

After automobile production ends in 2027, the facility is planned to be gradually transformed into a center of competence in the field of security and defense solutions. According to the plan, Aurelius, as the majority owner, will acquire the company Volkswagen Osnabrück GmbH jointly with the regional authorities. The main goal of the deal is the long-term preservation of the production site.

According to the works council, the implementation of the project will make it possible to preserve jobs for nearly 1,400 of the current 1,800 employees. Thus, about three-quarters of the personnel will receive new employment prospects.

The first major project, as DPA notes, may be cooperation with the Israeli defense concern Rafael, which produces air defense systems, guided missiles, and electronic warfare complexes. The company is known, in particular, as the developer of the "Iron Dome" air defense system.

At the initial stage, the cooperation envisages the possible development and production of components for air defense systems. Volkswagen stated that the workforce of the Osnabrück plant will be given a key role in organizing production and in the industrial implementation of the corresponding processes.

At the same time, the signed agreement does not yet mean the final sale of the facility. It is intended to become the basis for further steps, including the determination of areas of responsibility, the development of an economic and organizational structure, and preparation for a possible transition period.

The completion of the deal will depend on reaching final agreements, decisions by the relevant committees, and the approval of regulatory authorities.

The Volkswagen plant in Osnabrück was created on the basis of Karmann, the oldest body shop and contract manufacturer. The concern developed the site as a small multi-brand plant specializing in the production of small and ultra-small series, as well as in providing additional capacity for other plants of the concern in the event of excess orders.

Recently, the plant's employees have faced uncertainty. Production of Porsche models in Osnabrück ended at the end of 2025, and the Stuttgart brand subsequently abandoned a planned order for an electric sports car.

Currently, only the T-Roc Cabrio is produced at the facility. That is why the possibility of using the plant beyond traditional passenger car production has been discussed for a long time.