Israeli state owned Rafael Advanced Defense Systems is in advanced talks to convert a large Volkswagen plant in Osnabrueck, Germany, into a factory producing components for the Iron Dome air defense system, according to The Financial Times. The move could preserve around 2,300 jobs at the site, which is slated for closure as Volkswagen faces steep profit declines and considers shutting factories in Germany for the first time in its history.

Under the proposed plan, the facility would manufacture trucks that carry Iron Dome batteries, along with generators and launchers, though not the interceptor missiles. Production could begin within 12 to 18 months if an agreement is reached. Rafael is also planning a separate factory for producing the Tamir interceptor missiles.

The potential shift to defense manufacturing raises questions in Germany, where arms production has often faced moral opposition and where workers play a significant role in corporate decision making. The deal reflects growing defense cooperation between Israel and Germany, with additional Israeli companies also partnering with German firms to produce advanced rocket systems for European militaries.