Why Volkswagen plans building parts for Israel's Iron Dome system

Volkswagen, the world’s second-largest automaker, is considering a significant shift into defense manufacturing through discussions with Israeli firm Rafael Advanced Defense Systems to produce components for the Iron Dome air-defense system. The plan involves repurposing Volkswagen’s Osnabrück plant in Germany, which currently assembles the T-Roc Cabriolet but faces closure by 2027 due to declining demand. Instead of producing interceptor missiles directly, the factory would manufacture supporting equipment such as transport vehicles, launch units, and power systems. This move is driven less by a strategic pivot into weapons production and more by the need to preserve manufacturing capacity and jobs amid economic pressures on the automotive sector, including falling profitability, rising costs, and intense competition from Chinese electric vehicle makers. This development reflects broader industrial and geopolitical shifts in Europe, where increased defense spending following Russia’s invasion of Ukraine has created new opportunities for manufacturers with advanced production capabilities. Automakers like Volkswagen are well-positioned to adapt their high-precision factories to produce military equipment