Volkswagen strikes deal to shift plant from cars to air defence

{"text":[[{"start":10.2,"text":"Volkswagen has signed a deal with an Israeli investment group that will switch production at the German carmaker’s embattled Osnabrück factory from cars to components for the maker of Israel’s Iron Dome air-defence system."}],[{"start":23.28,"text":"Under the plan announced on Monday, Aurelius Capital will take a majority stake in the 125-year-old factory together with Lower Saxony, the state where VW is headquartered and its second-largest shareholder."}],[{"start":36.84,"text":"The deal follows months of negotiations to secure the future of the Osnabrück plant, which employs 1,800 people and was due to end vehicle production next year."}],[{"start":46.88,"text":"VW said Aurelius and Lower Saxony would develop the site as a manufacturing hub for defence equipment, adding the two had agreed to co-operate on an initial “anchor project” with Iron Dome maker Rafael Advanced Defense Systems. The agreement will include the potential production of air-defence systems and components for Germany and Europe."}],[{"start":67.4,"text":"It comes after the FT reported in March that VW was expected to start producing components for Rafael following talks with the state-owned group."}],[{"start":76.12,"text":"The move by VW is set to be the most high-profile example so far of Germany’s ailing automotive sector — which is struggling amid intense competition from Chinese rivals — seeking tie-ups with the thriving defence industry."}],[{"start":88.16,"text":"Europe’s largest carmaker is under pressure to streamline operations and reduce costs. Last week, its supervisory board approved a radical plan to cut 50,000 jobs and opened the door to ending new vehicle production at four German plants."}],[{"start":null,"text":"

"}],[{"start":103.12,"text":"The German group had separately been seeking to find a solution for the Osnabrück plant, where production of vehicles is set to end next year under a previous cost-cutting plan agreed in late 2024."}],[{"start":114.04,"text":"“We are taking an important step towards opening up a new industrial future for the site,” VW’s chief executive Oliver Blume said in a statement on Monday."}],[{"start":122.84,"text":"While German officials do not expect the arms industry to compensate for tens of thousands of job losses in the struggling auto sector, they are encouraging carmakers to forge partnerships with defence groups where possible."}],[{"start":134.04,"text":"Rafael is the latest in a number of international defence companies seeking to use Germany as a springboard into the European market. Berlin plans to spend about €700bn on defence over the next five years in response to Russia’s full-scale invasion of Ukraine as well as waning US support for European security."}],[{"start":153.88,"text":"Rafael also hopes to strike a deal with the German government for its Iron Dome system, which has a range of 70km and has primarily been used by Israel to stop rockets from Gaza from hitting its territory."}],[{"start":166.36,"text":"Rafael’s president and chief executive, Yoav Tourgeman, said that the agreement represented the start of “a long-term industrial relationship with our German partners with the idea that the technology will be fully produced in Germany, to protect Germany and Europe”."}],[{"start":180.68,"text":"Volkswagen workers’ council head Daniela Cavallo said the latest deal would secure the future for more than 1,200 workers at the factory."}],[{"start":188.4,"text":"“We will continue working on a solution to ultimately ensure that the entire core workforce has a future at the site,” Cavallo added."}],[{"start":201.76,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1788841581_2463.mp3"}