Volkswagen is preparing to withdraw from its Osnabrück plant, with an announcement expected as early as Monday, September 7th. The German carmaker will sell the factory to the state of Lower Saxony and the Munich-based private equity investor Aurelius Capital Fund. This move is part of Volkswagen's broader streamlining plan, which includes closing four factories and laying off up to 50,000 employees as it shifts focus to its "core assets." The Osnabrück plant, Volkswagen's smallest in Germany with 2,300 employees, currently produces cabriolet versions of the T-ROC model, with production ceasing in the second half of 2027.
The new consortium, comprising Lower Saxony and Aurelius, will collaborate with Israel's Rafael Advanced Defense Systems. Rafael plans to use the site to manufacture components for its Iron Dome air defense system, including trucks, generators, and launchers. This project is significant for Germany's defense industry and is expected to save thousands of jobs. Lower Saxony's Minister-President Olaf Lies, who was reportedly involved in negotiations, is set to announce the new partnership and confirm that "no jobs will be lost."
The deal structure was influenced by opposition from the Qatar Investment Authority, Volkswagen’s third-largest shareholder, which holds 10% of shares and 17% of voting rights. To bypass their potential blockade, Lower Saxony will purchase the factory directly, with Rafael and Aurelius Capital also involved. Aurelius specializes in "carve-outs," taking over and restructuring company divisions from large corporations, aiming to increase their value before reselling them. While Aurelius's involvement provides an immediate future for the plant and its employees, as a financial investor, its primary goal is economic return, meaning the long-term size and scope of the Osnabrück site could still evolve.
The state of Lower Saxony is actively considering a stake in the former Volkswagen plant. Minister President Olaf Lies stated that preserving jobs and value creation in Osnabrück is a top priority. Discussions have mentioned a potential investment of at least €200 million, possibly involving the federal government and Volkswagen maintaining some involvement. This would allow the site to be leased out and jobs to be saved. Lies, also a member of VW's supervisory board, has emphasized developing viable prospects with new partners rather than Volkswagen simply abandoning the site. Specific details regarding the participation amount and model are still under review.
