https://removepaywalls.com/https://www.ft.com/content/1e41e6db-792f-4f60-b567-adb6458fb072

Volkswagen is in talks with Israel’s Rafael Advanced Defence Systems over a deal that would switch production at one of the German group’s factories from cars to missile defence.

The two companies plan to convert the embattled Osnabrück plant to make components for the Israeli state-owned group’s Iron Dome air defence system, according to two people familiar with the plan.

Israel credits its complex web of air defences, which involves several different systems, with intercepting more than 90 per cent of missiles fired at the country by its adversaries.

The two companies hope to save all 2,300 jobs at the plant in the west German state of Lower Saxony, which has been under threat of closure, and hope to sell the systems to European governments.

The move comes as the EU’s largest nation plans to spend more than €500bn on defence by the end of the decade, with officials saying that air defence is one of their top spending priorities.

Under the plans, the Osnabrück factory would make various Iron Dome parts, including the heavy-duty trucks that carry the system’s missiles as well as launchers and electricity generators. But it would not produce the projectiles themselves.

Rafael plans to set up a separate production facility elsewhere in Germany for the system’s missiles, which must be handled on a specialist site.