A German car plant was set to close. Now it will build Iron Dome parts.
Volkswagen is selling the site to an Israeli defense firm. And 2,300 workers get to keep their jobs.
Rafael signed a letter of intent with Volkswagen. The deal would let Rafael take over VW's plant in Osnabruck. That's in western Germany.
The site was set to close. Now it has a future.
The plant will build launchers and generators. It will also build the trucks that haul Iron Dome batteries.
Rafael will build the missiles at a different site.
Iron Dome is Israel's short-range air defense system. It shoots down rockets and drones aimed at homes and cities.
First parts could ship in 12 to 18 months. Osnabruck was one of the first VW plants ever set to close.
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2025 was VW's worst year in nearly a decade. Operating profit fell 53.5% to €8.9 billion.
Net profit dropped 44% to €6.9 billion. That's the lowest level since Dieselgate.
The state of Lower Saxony owns a big chunk of VW. Qatar owns 10% more.
Both have pushed for years to keep the Osnabruck workers on the job.
So a deal that swaps cars for missile parts is a fix for VW's board. It saves the jobs. It also dodges a fight with German labor unions.
VW had said it might close some German plants for the first time in its history. That break with tradition shook the firm's image as a jobs anchor. A swap to defense work is a much softer landing.
Iron Dome has been sold to Finland, Greece and Romania. Germany is in talks to buy it too.
That's part of why Rafael wants to build inside Germany. Berlin tends to back firms that build at home.
Israeli firm Elbit is also using German plants. Elbit works with Diehl and KNDS on the EuroPuls rocket. The full deal could be worth up to €6 billion.
European defense spend is now at its highest level since the Cold War. That helps deals like this come together fast.
VW is not the only carmaker feeling this shift. German firms are looking at idle plants and asking if defense work could fill them. The Rafael deal is the first big test of that idea.
German workers have a big say in firm choices. And arms work is a touchy topic in Germany.
So workers at the Osnabruck plant get to weigh in. Their vote is the next step.
If they say yes, a plant that built cars for decades will start to make launchers. Iron Dome is one of the world's top air defense systems.
The German car slump just became the European arms industry's best hiring pitch.
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