Europe’s largest automaker, the Volkswagen Group, is grappling with challenges from a slow transition to electric vehicles and growing competition from China.

As part of plans to cut 50,000 jobs by 2030, VW will close its Osnabrueck plant, which employs about 2,300 people producing the T-Roc Cabriolet and Porsche’s Cayman and Boxster models.

VW CEO Oliver Blume said the company is exploring alternative uses for the factory, including potential collaboration with Israel’s Rafael Advanced Defence Systems to manufacture components for the Iron Dome air defence system.

Volkswagen intends to focus on heavy-duty trucks and power generators—but not the missiles themselves. VW emphasized it would focus on military transport rather than weapons production.

This shift could help Volkswagen offset declining profits—the lowest in nearly a decade—while taking advantage of Europe’s expanding defence industry.

Officials welcomed initiatives that preserve jobs amid intense global automotive competition.