Volkswagen agrees to sell Osnabrück plant for defence production

Volkswagen has reached a preliminary agreement to transfer ownership of its Osnabrück plant in Lower Saxony to a partnership between the state government and Israeli investor Aurelius Capital. The deal, announced amid a broader restructuring of the automaker’s manufacturing network, stipulates that from mid‑2027 the historic facility will be repurposed to produce equipment for Rafael Advanced Defence Systems, the firm behind Israel’s Iron Dome missile‑defence system.

The transaction comes as Germany’s economy grapples with the political fallout of the far‑right Alternative for Germany (AfD) securing a historic victory in the Saxony‑Anhalt state election, a development analysts say could affect investor confidence and fiscal policy. While the Osnabrück plant’s shift to defence manufacturing signals a diversification of industrial output, officials note that the sale aims to preserve jobs and sustain regional economic activity despite the broader uncertainties facing the German market.