The Qatar Investment Authority (QIA), a major Volkswagen shareholder, blocked a proposed agreement between Volkswagen and Israeli defense company Rafael to manufacture Iron Dome components at a factory in Germany, according to German newspaper Bild.
Qatar’s sovereign wealth fund, Volkswagen’s third-largest shareholder, reportedly vetoed a plan to repurpose the automaker’s struggling plant in Osnabrück, putting hundreds of additional jobs at its German factories at risk.
A potential solution to save the plant appeared to have been found in late April, when Volkswagen signed a letter of intent with Rafael. Under the proposal, the Israeli company would manufacture components for the Iron Dome missile defense system at the facility.
The Qatari shareholders have since expressed reservations about the agreement because of tensions between Qatar and Israel, according to the report.
The state-owned Qatar Investment Authority, or QIA, holds 17% of Volkswagen’s voting rights and 10.4% of its total share capital, giving it significant influence over decisions made at the company’s headquarters in Wolfsburg.
Senior Qatari officials sit on Volkswagen's supervisory board
QIA CEO Mohammed Saif Al Sowaidi and two former members of the Qatari government serve on Volkswagen’s supervisory board.
Qatar, which for years was considered a major financial supporter of Hamas in the Gaza Strip, opposes the proposed production of weapons components intended solely to defend Israel against rocket attacks.
Security expert Peter R. Neumann of King’s College London warned in an interview with Bild that although investments from Gulf states are welcome, "the same principle applies here as elsewhere: We must not become dependent on anyone."
Neumann argued that "we need to take a more pragmatic approach to this region."
Rafael seeks to expand Iron Dome production overseas
The Jerusalem Post previously reported that Rafael was holding talks with defense companies in India about establishing a production line for Iron Dome interceptors in the country.
Should the plan move forward, it is expected to expand Rafael’s production network beyond Israel and the US while giving the company greater flexibility in supplying the system to customers worldwide.
Iron Dome interceptors are currently manufactured at a Rafael plant in northern Israel. Another production line began operating in the US last year as part of a partnership with Raytheon, according to the report.
The US line is intended to supply interceptors for the US Marine Corps’ new air defense system. It could also reinforce Israel's production capabilities if necessary.
Establishing a production line in India would serve several objectives. It could allow Rafael to expand sales to additional countries, reduce production costs, provide backup for its existing production lines, and strengthen its position in the Indian defense market.
The move would also carry strategic implications for Rafael’s business operations.
India requires foreign defense companies seeking to sell products to its military to manufacture them in the country and, in some cases, export them from India.
