From cars to air defense. Volkswagen has announced a project to convert its German site in Osnabrück, western Germany, to the air defense sector. The objective of the operation, announced today, Monday 7 September, through a press release, aims to “preserve a substantial part of the jobs in the long term” of the troubled site. The company announced that it has reached a formal agreement with the State of Lower Saxony and the investment fund Aurelius Capital for the potential sale of the subsidiary Volkswagen Osnabrück GmbH, an operation which will see Aurelius assume the role of majority shareholder.
The partnership with the Israeli company
The project involves collaboration with the Israeli company Rafael Advanced Defense Systems. The cooperation involves the production of air defense systems and components for the markets of Germany and the rest of Europe. According to Volkswagen, this initial agreement should pave the way for subsequent partnerships and other industrial projects managed under the umbrella of the new company.
The German manufacturer had already planned in 2024 to permanently cease vehicle production at the Osnabrück plant by the summer of 2027: “The company will support the transition to the new corporate structure and will make its industrial experience, development and industrialization expertise as well as existing infrastructure available to the process. For 125 years, the Osnabrück plant has stood for industrial competence, flexibility and the ability to create special solutions. these strengths, Osnabrück will gradually transform from a competence center for small series production and special vehicles to a competence center for security and defense solutions. The existing production facilities, the high level of qualification of the employees and the many years of experience in production, quality and industrialization form the necessary foundations for this development.”
“The plan – reads the press release – envisages that Aurelius, as the majority shareholder, will take over Volkswagen Osnabrück GmbH together with the State of Lower Saxony. Aurelius and the State of Lower Saxony intend to transform the site, in the first years, into a competence center for solutions in the field of security and defense. As a first reference project, Aurelius and the State of Lower Saxony plan to collaborate with Rafael Advanced Defense Systems. These plans include potential production of systems and components for air defense systems for Germany and Europe. While Rafael would bring its technological expertise and its many years of experience in the field of modern air defense systems, the Osnabrück workforce would play a central role in the start-up of production activities and the industrialization of production. The collaboration also aims to pave the way for further partnerships and projects under the umbrella of the new company.”
The jobs
The announcement of the reconversion follows a few days after the historic agreement reached between shareholders and workers’ representatives for the implementation of massive cost reduction measures within the Group, aimed above all at restoring the Volkswagen brand, on its knees due to the crisis in the automotive sector. Volkswagen’s works council welcomed the breakthrough, underlining that the solution offers stable future prospects for almost 1,400 employees, a figure which corresponds to around three-quarters of the 1,800 workers currently employed in Osnabrück.
Furthermore, considering the natural exits already foreseen for the next few years through early retirements and retirements, the board has estimated that the theoretical staff of the new competence center will be around 1,200 jobs. An employment guarantee has been agreed for these personnel which will remain valid until the end of 2029. Aurelius Capital, the fund that will lead the operation, is an investment company based in Tel Aviv, Israel, specialized in the development of advanced technologies in the defense, cybersecurity, artificial intelligence and critical infrastructure sectors.
“Volkswagen assumes its responsibility towards Osnabrück – commented Oliver Blume, CEO of the Volkswagen Group -. With today’s agreement, we are taking an important step towards opening up a new industrial future for the plant. The employees of Osnabrück have demonstrated time and again how much competence, flexibility and commitment this plant has to offer. The plant will also be able to rely on these strengths in the future”.