Rafael Signs Deal to Acquire VW's Osnabrueck Plant for Missile Defence
Rafael's Strategic Acquisition and the Shift in German Industry
By Christina Amann
Background of the Deal
BERLIN, April 30 (Reuters) - Rafael Advanced Defence Systems has signed a letter of intent with Volkswagen AG to acquire the German automaker's plant in Osnabrueck in western Germany, two people familiar with the matter said on Thursday.
Statements from Involved Parties
Both VW, which announced sweeping plans to overhaul its struggling core car business on Thursday, and Israeli government-owned Rafael declined to comment. However, VW Chief Executive Oliver Blume told a call with investors that the group was in advanced talks with defence companies over the plant.
Volkswagen's Plans for the Osnabrueck Plant
Volkswagen previously said it wants to sell or reconfigure the site, which employs around 2,300 people, as part of a wider revamp, but has ruled out the production of weapons.
Transition from Automotive to Defence
Production Shift Details
The Financial Times reported in March that VW and Rafael were in talks to shift production at the plant from cars to missile defence.
Focus on Missile Components
Rafael, one of the main partners in Israel's Iron Dome, Arrow and David's Sling air and missile defence systems, would focus on building missile parts including motors rather than on explosives, which, for security reasons, would be built at a separate site, the sources said.
Implications for German Industry
The switch from auto components would reflect German industry's growing focus on defence as the government in Berlin has set aside hundreds of billions of euros to rebuild the military after decades of neglect.
Government and Industry Perspectives
Government Oversight and Technology Control
People familiar with the issue said the German government wanted to ensure it retained overall control over defence technology projects in Germany and that the technology remained in Germany.
Benefits for Defence Companies
For defence companies, partnerships with automakers offer a base of industrial expertise, with skilled workforces as well as plant adapted to engineering and metal work that offers production at a scale greater than the specialised facilities they typically work with.
Broader Context: Evolving Warfare and Policy
Impact of Recent Conflicts
The wars in Ukraine and Iran have also made clear how the nature of warfare has been transformed by the development of cheap drones for both offensive purposes and anti-aircraft defence.
Official Responses
The defence ministry in Berlin declined to comment but a spokesperson said it was working closely with the economy ministry on potential defence projects with industrial companies in the civil sector.
(Additional reporting by Emily Rose in Jerusalem, Writing by James Mackenzie;Editing by Elaine Hardcastle)
