Volkswagen in talks with defence firms on use of German plant: CEO


By AFP
March 27, 2026


Volkswagen cars waiting last month to be put aboard a ship for export near the company's factory in Emden, northwestern Germany - Copyright AFP Indranil Mukherjee

Struggling German carmaker Volkswagen is in talks with defence firms to repurpose a plant in northern Germany for the production of military transport equipment, the firm’s boss said Friday.

Europe’s biggest auto manufacturer is battling a crisis due to factors ranging from a stuttering shift to electric cars and fierce Chinese competition, and the 10-brand Volkswagen Group is in the process of cutting 50,000 jobs by 2030.

As part of the savings plans, car production is due to end at a factory in the city of Osnabrueck, and the group has been exploring other uses for it.

“We are in contact with various defence companies,” Volkswagen Group CEO Oliver Blume said at a congress organised by the FAZ newspaper in Frankfurt.

“This could also be a solution for Osnabrueck,” he added.

The Financial Times reported this week Volkswagen is in talks with Israel’s Rafael Advanced Defence Systems to switch production at VW’s Osnabrueck plant to make components for the Iron Dome air defence system, including heavy-duty trucks and electricity generators but not the projectiles themselves.

Volkswagen could benefit from the expansion into the defence sector, which is booming as Europe re-arms. That could help offset losses at its carmaking business, with profits last year at their lowest for almost a decade.

Blume however insisted that Volkswagen was “not concerned with weapons systems”.

“The Volkswagen company’s activities in the defence sector would rather focus on military transport, because that is our core competence.”

Volkswagen is battling problems from weak demand to Chinese competition – Copyright Belga/AFP BENOIT DOPPAGNE

Volkswagen’s Osnabrueck site currently employs about 2,300 people making the T-Roc Cabriolet as well as the Cayman and Boxster for sister brand Porsche.

The agreement to wind down production there was part of an agreement struck with unions at the end of 2024.

Asked about the FT report earlier this week, a government spokesman declined to comment directly.

But he noted that “the automotive industry is undergoing a transformation and faces intense international competition.”

“We naturally welcome initiatives that secure jobs in Germany.”