Volkswagen considers move into Iron Dome production at German site

Volkswagen is reportedly exploring a deal to manufacture parts for Israel’s Iron Dome missile defence system at a factory in Germany, marking a significant shift by the struggling carmaker towards military production.

According to the Financial Times, the German auto giant has held talks with Israel’s Rafael Advanced Defense Systems about repurposing its plant in Osnabruck to produce key components for the system, including launch platforms, power units and heavy-duty vehicles used to transport missile batteries.

The reported move highlights the pressure facing Germany’s car industry as manufacturers struggle to compete with Chinese electric vehicle makers and falling demand in key markets. It also signals a wider turn towards defence production across parts of German industry, backed by increased military spending from Berlin.

Production at the Osnabruck site could reportedly begin within 12 to 18 months and would require only limited new investment.

The development also carries historical significance. Volkswagen, founded during the Nazi era, switched from civilian vehicle production to military manufacturing during the Second World War.

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Germany has deepened its military relationship with Israel in recent years. In December, Berlin approved a $3.1 billion deal for Israel’s Arrow 3 missile defence system, following a $3.5 billion agreement signed two years earlier. Together, the deals were described as Israel’s largest arms sale to date.

Germany supplies about 30 percent of Israel’s imported weapons, second only to the United States, which accounts for nearly 60 percent.

The reported talks come as Israel faces growing international scrutiny over its assault on Gaza. Israeli Prime Minister Benjamin Netanyahu and former Defence Minister Yoav Gallant are wanted by the International Criminal Court for war crimes and crimes against humanity.

At the same time, South Africa’s case at the International Court of Justice accuses Israel of genocide in Gaza. The court has said there is a plausible risk of genocide, raising further legal and political questions for states continuing to support Israel militarily.

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