Negotiations over converting Volkswagen's Osnabrück plant into a Rafael facility to produce Iron Dome components remain active, according to German business magazine WirtschaftsWoche, contradicting earlier reports suggesting the deal had collapsed.
WirtschaftsWoche reported on July 16 that "negotiations are still ongoing" Over the conversion to produce trucks and components for the Iron Dome air-defense system, indicating that a final decision has not been reached.
Earlier coverage claimed the Qatar Investment Fund, which holds a 17% stake in Volkswagen, had effectively blocked the transaction. However, WirtschaftsWoche's reporting suggests discussions continue. According to reporting obtained by JNS, the narrative of a definitive Qatari veto is inaccurate, and Qatar's 17% voting stake is not currently being deployed to block the deal.
Qatar's involvement has drawn criticism in Germany, particularly as the country's separate holdings in Hapag-Lloyd shipping had previously been cited as an Israeli security concern in blocking the sale of Zim Integrated Shipping Services, in which Israel retains a golden share for national security reasons.
WirtschaftsWoche noted that "it is not clear whether its [Qatari Investment Fund] opposition to the deal constitutes an absolute veto."
The works council head at the Osnabrück plant, which employs approximately 2,400 workers, told WirtschaftsWoche that "a smart solution must be found." He urged Lower Saxony, which holds roughly 20% of Volkswagen's shares, to acquire a majority stake in the plant specifically, a step that could enable the Rafael transaction to proceed.
A security expert quoted by WirtschaftsWoche suggested Qatar might seek concessions from the German government in return for withdrawing opposition, stating, "We live in times when difficult agreements have to be made with complicated players."
The dispute emerged publicly in June 2026 when Reuters reported Qatar was complicating negotiations, though the outcome remained uncertain. In July, German newspaper Bild claimed Qatar had effectively vetoed the deal, while WirtschaftsWoche's later reporting indicated talks persisted.
The underlying context involves Volkswagen's financial pressures, including eroded market share from Chinese manufacturers and challenges establishing dominance in electric vehicles, prompting restructuring including layoffs and closures. Converting the Osnabrück facility to defense manufacturing aligns with Europe's expanded military spending while preserving roughly 2,300 jobs.
Rafael has been expanding across Europe amid rearmament following Russia's invasion of Ukraine and regional security tensions. Greece signed a €3.5 billion air-defense deal with Rafael in July, Romania announced a €2.3 billion agreement in June, and Finland purchased a system for €317 million in November 2023.