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11:36 AM · 25 March 2026

Volkswagen: Could a potential deal with Israel save the plant in Saxony?

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As reported by the Financial Times, Volkswagen is currently in talks with Rafael Advanced Defense Systems to establish cooperation related to military production. At stake is the potential rescue of one of the company’s Saxon plants, which is threatened with closure.

The deal is expected to involve converting the facility into a plant producing components for Israel’s “Iron Dome” defense system. VW’s factory in Osnabrück currently employs ~2,300 people. The group is facing growing difficulties in maintaining employment levels, and given the company’s capabilities and expertise, a potential order could come from Israel, which is currently struggling with shortages of rocket ammunition and support systems.

This is a small but noteworthy “consolation” for the company’s employees. The company’s estimates and forecasts assume a further reduction in headcount by another 30,000–50,000 by the end of 2030. At the end of 2024, the company’s workforce, excluding plants in China, amounted to 614,000 people, of whom 293,000 positions were located in Germany.

This is not the first initiative in the defense market in recent quarters—several months ago the company received a significant truck order from the German armed forces.

VWOV1.DE (D1)

 

The company’s shares are reacting with a small bullish gap to the news about the potential deal. The price is breaking above the key €89–90 per share level; however, it still remains near the lower boundary of the long-term upward trend. Source: xStation5.

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