Israel’s Iron Dome manufacturer is facing a production setback for key parts after German carmaking titan Volkswagen announced that its Osnabruck plant will cease production by 2027.
The automaker’s decision has put Israeli company Rafael Advanced Defense Systems at risk of losing a vital manufacturing pipeline for its missile components.
Rafael had aimed to produce Tamir interceptor missiles for its Iron Dome air defence system at the German facility amid ongoing conflicts in Lebanon and with Iran, which involve both Israel and the US.
Volkswagen announced plans in early 2026 to cease vehicle production at the Osnabruck plant by 2027, facing intense competition and an ongoing struggle with the transition in the electric vehicle market, particularly from Chinese and other European rivals.
Volkswagen signed a letter of intent in late April to retool the facility for defence manufacturing, partnering with the Israeli state-owned defence firm Rafael to produce components for the Iron Dome missile defence system, to save approximately 2,300 jobs.
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Local peace activists, labour representatives, and Germany’s Left Party voiced strong opposition to converting the automotive factory into an arms production site for Israel, due to Tel Aviv’s genocidal war in Gaza.
Internal friction also sparked the crisis after the Qatar Investment Authority — holding 10.4 percent stake, 17 percent voting rights and two seats on Volkswagen’s supervisory board — voiced strong structural reservations.
