Volkswagen is in talks to convert one of its German car factories into a manufacturing hub for the Israeli Iron Dome system.
Under the prospective deal between Volkswagen and Israeli defence firm Rafael, the carmaker’s Osnabrück plant would build launchers, electricity generators and heavy-duty trucks that carry the system’s missiles, the FT has revealed.
Osnabrück would not, however, play any part in producing the missiles, which would be manufactured by Rafael at a separate factory in Germany.
The German government is reported to be pushing for the deal to happen which, it is hoped, could save all 2,300 jobs at the Lower Saxony plant, which has been under threat of closure.
Volkswagen has been struggling financially partly due to increased competition from Chinese manufacturers.
One source familiar with the plans told the FT: “The aim is to save everybody, maybe even to grow. The potential is so high - but it’s also an individual decision for the workers if they want to be part of the idea.”
They went on to say that it is an opportunity for “proven [defence] tech coming together with German manufacturing”.
If the plans are to go ahead, production could be up and running by early next year.
Rafael reportedly chose Germany because it believes the country to be one of Israel’s strongest allies in Europe.
It was also reported that if the deal goes ahead Rafael would sell the components manufactured at Osnabrück to other European countries for their defence systems.
A Volkswagen spokesperson told the FT the company was in discussions with “various market players” but that there were “currently no concrete decisions or conclusions regarding the future direction” of the Osnabrück site.
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