- Qatar reportedly opposed Volkswagen’s planned partnership with Israel’s Rafael.
- The deal could have preserved roughly 2,300 jobs at a German factory.
- Volkswagen continues searching for new uses for the struggling plant.
Volkswagen, one of the world’s largest automakers, just had itself checked by a larger power. According to a new report, Qatar just stepped in to flex its strength over the automaker. VW has a struggling factory in Germany, and it had the idea to partner up with an Israeli defense contractor. Now, that deal is evidently off the table.
According to Bloomberg and Germany’s Bild, Qatar Investment Authority (QIA) vetoed a proposed joint venture between Volkswagen and Rafael Advanced Defense Systems, the Israeli defense company behind Iron Dome. Bloomberg reports the partnership would have repurposed Volkswagen’s Osnabruck plant to manufacture military trucks used to carry elements of the mobile air-defense system.
More: Tariff Threats May Push VW Back Into Military Manufacturing
The Osnabruck factory is at the center of Volkswagen’s effort to restructure and cut costs. As things stand, it’s struggling with weakening demand in Europe. For the time being, production at the plant could end as soon as next year. That said, reports indicate that VW and Rafael had already signed a letter of intent earlier this year to explore converting the site for defense-related manufacturing.
The sticking point was reportedly the Qatar Investment Authority, Volkswagen’s third-largest shareholder. QIA owns approximately 10.4 percent of Volkswagen’s shares and controls about 17 percent of its voting rights through its stake, giving it significant influence over major corporate decisions. Relations between Qatar and Israel have deteriorated since the Gaza war began.
Bloomberg reports there were questions over whether the German government would ultimately procure the vehicles, as the country’s existing layered air-defense network already includes Israel’s Arrow 3 system, the U.S.-built Patriot system, Germany’s IRIS-T, and Skyranger platforms. Volkswagen and Qatar Investment Authority had not commented on the reports at the time of writing.
For its part, Rafael said only that it remains interested in expanding industrial cooperation in Germany. That said, workers at the Onsbruck factory are still left wondering what will become of their jobs a year or so from now.
