Israeli Firm Rafael Buys German Factory From Volkswagen for Iron Dome Parts
Rafael, one of the main partners in Israel’s Iron Dome, Arrow and David’s Sling air and missile defense systems, would focus on building missile parts rather than on explosives, which would be built at a separate site, sources said.
Rafael Advanced Defense Systems has signed a letter of intent with Volkswagen to acquire the German automaker’s plant in Osnabrück in western Germany, two people familiar with the matter said on Thursday.
Volkswagen previously said it wanted 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.
The Financial Times reported in March that VW and Rafael were in talks to shift production at the plant from cars to missile defense, namely the Iron Dome system.
Rafael, one of the main partners in Israel’s Iron Dome, Arrow and David’s Sling air and missile defense 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.
Both Volkswagen, which had announced sweeping plans to overhaul its struggling automobile business, and Rafael refused to comment for Reuters. However, VW chief executive Oliver Blume told a call with investors that the group was in advanced talks with defense companies over the plant.
Germany’s Defense Ministry declined to comment, but a spokesperson said it was working closely with the Economy Ministry on potential defense projects with industrial companies in the civil sector.
Iron Dome batteries sell for around $100 million, and each antiballistic missile that it fires costs around $50,000-$100,000.
Rafael has reportedly been in talks to sell Iron Dome to countries like Romania and Cyprus. However, the company has never officially published deals regarding sales in Europe. When Russia invaded Ukraine in 2022, Ukraine vigorously lobbied Israel to sell it the system, but Israeli officials feared taking Ukraine’s side in the war.
The move to establish a factory in Germany likely attests to the advancement in Rafael’s sales of the system in Europe. Rafael already has Iron Dome production plants in the United States, the result of the firm’s collaboration with U.S. military manufacturer Raytheon in producing the system.
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