ALBAWABA — Qatar’s sovereign wealth fund has reportedly vetoed a proposed partnership between Volkswagen and Israeli defense company Rafael Advanced Defense Systems to make components for Israel’s Iron Dome missile defense system at a Volkswagen factory in Germany.
Bild tabloid in Germany said authorities from the Qatar Investment Authority (QIA) were against the project. QIA owns more than 10% of Volkswagen’s shares and over 17% of the company’s voting rights, giving it an important voice in key corporate decisions.
The proposed deal would have given a new lease of life to Volkswagen's ailing Osnabrück plant, which the firm said it planned to close by 2027. Volkswagen signed a statement of intent with Rafael late in April, and the factory seemed to have received a lifeline.
Under the proposal, Rafael was to produce parts for the Iron Dome missile defense system at the German plant.
Protests in Qatar
Qatari officials have opposed the proposal, stating that the production of military equipment meant to defend Israel from missile assaults is incompatible with Doha’s political stance on the Israeli-Palestinian issue, media sources stated.
Qatar has condemned Israel’s military attacks in Gaza several times, and has always taken a diplomatic position on Israeli military actions in the region.
QIA Chief Executive Mohammed Saif Al-Sowaidi and two former Qatari government officials are also on Volkswagen’s supervisory board, further entrenching Qatar’s position in the corporation.
Opposition at home in Germany
The planned alliance also drew criticism at home in Germany.
The Left Party (Die Linke) ruled out any collaboration with Rafael, deeming a defense relationship undesirable. Party officials pointed to Israeli military actions during the tenure of Prime Minister Benjamin Netanyahu, accusing Palestinians in Gaza of war crimes and genocide, which Israel fiercely denies.
Critics say a possible move by Volkswagen into the defence sector would be a dramatic departure from the company's traditional industrial character, while proponents say Germany's current manufacturing base should be used to fulfill rising global demand for defence equipment.
Rafael Accelerates Iron Dome Production
Rafael has sought to expand production of Iron Dome outside of Israel.
The Jerusalem Post earlier reported that the corporation is in talks with defense firms in India to set up a production line for Iron Dome interceptor missiles there.
If carried out, the Indian project would further extend Rafael’s production footprint beyond of Israel and the United States.
Iron Dome interceptors are built today in a Rafael plant in northern Israel and a second line of production started last year in the United States in cooperation with Raytheon.
“By adding more production lines overseas, it will increase exports, reduce manufacturing costs, keep a backup production capacity and strengthen its position in major international defense markets, especially India,” says Rafael.
