Volkswagen’s return to manufacturing weapons, this time for Israel, is symptomatic of the turn to militarism across Europe, argues Terina Hine

In a grotesque repeat of its history, the German car manufacturer Volkswagen is reported to be returning to its dark roots, once again moving from civilian car production to military manufacturing. This time around, rather than producing hardware for the Nazis, it’s planning to get into bed with another state committing a genocide, with plans to go into business with the Israeli state-owned weapons manufacturer, Rafael Advanced Defence Systems.

The famous German car company was established in 1937 to produce the ‘people’s car’, but shortly after, with the outbreak of World War II, production moved from civilian vehicles to arms for Hitler’s war effort. In the process, the company used more than 15,000 slave labourers, housing four concentration camps and eight forced-labour camps. In 1944, one of its engineers travelled to Auschwitz to select Jewish metal workers personally.

After the war, VW was saved from being dismantled and was run by the British occupying force, producing cars for allied personnel. In 1949, the company was returned to German ownership. It became famous for its Beetle car and the VW Camper Van. By 2024, it was ranked the world’s second-largest car maker by sales. Last year, it was the largest car manufacturer in Europe, with the best-selling electric-car brand and almost a third of the European market share.

Yet thanks to Trump’s tariffs and competition from China, VW share prices have fallen dramatically, and though it still made a net profit of €7 billion last year, neither this nor its lead position among European car makers prevented the plant at Osnabrück being threatened with closure.

So VW is attempting to transition its Osnabrück site to military production and embrace Germany’s growing defence industry, with the full support of the German government. This move is the second attempt at diversifying to military production in just a few months. In 2025, VW tried to sell Osnabrück to the German defence company Rheinmetall, but the deal fell through. Now they have made moves, which if successful, will see the plant produce Iron Dome parts, missile launchers, heavy-duty trucks to transport missiles, and electricity generators.

German military manufacturing is booming, the country plans to spend more than €500 billion on defence by the end of the decade and more and more companies are expected to pivot towards the defence sector. The country already hosts one Raphael plant, and VW is already involved in producing military trucks alongside its subsidiary MAN and Rheinmetall. But this deal would be a significant shift change.

The deal between VW and Raphael reflects a changing economic model being pursued across Europe. The mass militarisation of the continent will accelerate the move from cars to weapons. In January, French car manufacturer Renault announced it would be producing drones for Ukraine and France. But, as evidenced by the Alternative Defence Review, such military investment will do little to help floundering European economies. Military spending has one of the lowest ‘employment multipliers’ of all economic activity, while profits from arms manufacturing almost entirely remain with the arms manufacturer.

The militarisation of European economies should concern us all. It creates a permanent pressure for war, creating an ever more dangerous world. Germany, along with other European countries, is investing heavily in the arms industry while simultaneously cutting social and welfare programmes.

Over the Easter weekend, peace activists organised protests against the militarisation of the Osnabrück plant. Stephan Krull, a former employee commented that with its Nazi past, VW has a historical responsibility to not produce arms, while other locals say the move to military production would be a betrayal of the town’s heritage as a city of peace.

It took VW a generation to recover its brand image following World War II. Today, few who fall in love with the Beetle or explore the open road in an iconic VW Camper remember the company’s dark Nazi past. To make a deal with the Israeli state military would be the second time in its history VW was servicing a genocidal state.

Dark days indeed.

From this month’s Counterfire freesheet