KNDS, the Franco-German defence manufacturer, is in active discussions with Mercedes-Benz about taking over the automaker's Ludwigsfelde plant, located just south of Berlin, a development reported on Thursday.
According to the report, talks cover the transfer of the site and approximately 2,000 employees. The structure being considered would have KNDS initially lease part of the factory and subsequently complete a purchase. During that transition period, the defence firm would be able to produce military vehicles on-site while Mercedes continues to build vans.
Simultaneously, KNDS is said to be exploring a move to acquire Volkswagen's Osnabrueck facility in western Germany. The company confirmed to Spiegel that it is engaged in conversations with a number of firms about purchasing production capacity, indicating a broader effort to secure factory space through acquisitions or similar agreements.
Mercedes-Benz declined to comment on the matter. Volkswagen provided a statement saying it was "in discussions with various market players regarding different options" for the Osnabrueck location after current production operations conclude in 2027.
Separately, in late April, Rafael Advanced Defense Systems signed a letter of intent with Volkswagen to buy the Osnabrueck plant. Volkswagen CEO Oliver Blume has told investors that the company is in advanced negotiations with defence contractors for the facility. Volkswagen had earlier publicised plans to either sell or restructure the Osnabrueck site.
Context and implications
The reported negotiations outline a phased approach to facility transfers - an initial lease of capacity followed by a full acquisition - which would allow ongoing civilian production to coexist with new military vehicle output during a transition. The developments reflect active interest from defence contractors in industrial capacity being vacated or restructured by major automakers.
What is known and what is not
- The discussions involve KNDS and Mercedes for the Ludwigsfelde plant and KNDS is exploring options for Volkswagen’s Osnabrueck plant.
- Roughly 2,000 employees at Ludwigsfelde are part of the potential transfer.
- Mercedes declined to comment; Volkswagen confirmed ongoing discussions about Osnabrueck after 2027 production ends.
- Rafael Advanced Defense Systems has a letter of intent with Volkswagen for Osnabrueck; Volkswagen leadership has said it is in advanced talks with defence contractors.
Beyond these points, details such as a firm timeline, financial terms, or binding agreements have not been disclosed in the reporting and remain uncertain.