diff --git a/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/Manifest b/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/Manifest
index 864efd4706..95466c608b 100644
--- a/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/Manifest
+++ b/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/Manifest
@@ -1 +1 @@
-DIST open-vm-tools-11.3.5-18557794.tar.gz 4218935 BLAKE2B 41e3f5877a5074bfb206870d7bdba613a468aa104d6d497dcf16e80b24fcbdd2195fcce370b150ced4665dd19296ff27dc06922d2742a43f5bf70b1b5eea9d48 SHA512 fa31f5615c9c90865ba9122f7fcd0831068d48defee30a5f5c620e744b76ccd5b7cc2de20cea4e37b596f99619ffb7bb47774de04e7c4bea666c7c0b6fa1560e
+DIST open-vm-tools-12.0.0-19345655.tar.gz 4346397 BLAKE2B 7977c171f031216a93c8a6e0706e91d620c129f81ad63cd0c068f4e8f88957056547b0b1f15a133ab21f24acdbede26baf457db67ca13c4ed6497ed0e7f7da94 SHA512 5c41ed81eb0e2755ca4a4adf8691f60daf016577d4b98ede36916fb95412f5dfdc086a3a42ef87fcb669ce7026ea1383a2dccc49fe30d192b187b8592a25e935
diff --git a/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/files/open-vm-tools-0001-configure-Add-options-for-fuse-hgfs-and-udev.patch b/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/files/open-vm-tools-0001-configure-Add-options-for-fuse-hgfs-and-udev.patch
index 60bd09a383..1501b9ba31 100644
--- a/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/files/open-vm-tools-0001-configure-Add-options-for-fuse-hgfs-and-udev.patch
+++ b/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/files/open-vm-tools-0001-configure-Add-options-for-fuse-hgfs-and-udev.patch
@@ -11,28 +11,6 @@ diff --git a/open-vm-tools/configure.ac b/open-vm-tools/configure.ac
 index ab315b84..33839087 100644
 --- a/open-vm-tools/configure.ac
 +++ b/open-vm-tools/configure.ac
-@@ -519,6 +519,13 @@ fi
- #
- # Check for fuse.
- #
-+AC_ARG_WITH([fuse],
-+   [AS_HELP_STRING([--without-fuse],
-+   [compiles without fuse support.])],
-+   [],
-+   [with_fuse=yes])
-+
-+if test "$with_fuse" = "yes"; then
- AC_VMW_CHECK_LIB([fuse],
-                  [FUSE],
-                  [fuse],
-@@ -529,6 +536,7 @@ AC_VMW_CHECK_LIB([fuse],
-                  [have_fuse=yes],
-                  [have_fuse=no;
-                   AC_MSG_WARN([Fuse is missing, vmblock-fuse/vmhgfs-fuse will be disabled.])])
-+fi
- 
- #
- # Check for PAM.
 @@ -1425,7 +1433,13 @@ if test "$os" = "solaris"; then
     fi
  fi
diff --git a/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/open-vm-tools-11.3.5.ebuild b/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/open-vm-tools-12.0.0.ebuild
similarity index 94%
rename from sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/open-vm-tools-11.3.5.ebuild
rename to sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/open-vm-tools-12.0.0.ebuild
index 2f0066dcab..c84c1be9b6 100644
--- a/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/open-vm-tools-11.3.5.ebuild
+++ b/sdk_container/src/third_party/coreos-overlay/app-emulation/open-vm-tools/open-vm-tools-12.0.0.ebuild
@@ -7,13 +7,14 @@ inherit autotools flag-o-matic multilib toolchain-funcs
 
 DESCRIPTION="Opensourced tools for VMware guests"
 HOMEPAGE="https://github.com/vmware/open-vm-tools"
-MY_P="${P}-18557794"
+MY_P="${P}-19345655"
 SRC_URI="https://github.com/vmware/open-vm-tools/releases/download/stable-${PV}/${MY_P}.tar.gz"
 
 LICENSE="LGPL-2.1"
 SLOT="0"
 KEYWORDS="amd64 ~x86"
-IUSE="+dnet +pic +deploypkg" # TODO: pam
+# Flatcar: add USE flag salt-minion
+IUSE="+deploypkg +dnet +pic salt-minion" # TODO: pam
 
 DEPEND="dev-libs/glib:2
 	net-libs/libtirpc
@@ -72,6 +73,8 @@ src_configure() {
 	local myeconfargs=(
 		--prefix=/usr/share/oem
 		$(use_enable deploypkg)
+		$(use_enable salt-minion)
+		--disable-containerinfo
 		--disable-docs
 		--disable-multimon
 		--disable-tests
diff --git a/sdk_container/src/third_party/coreos-overlay/changelog/updates/2022-03-09-open-vm-tools-12.0.0-update.md b/sdk_container/src/third_party/coreos-overlay/changelog/updates/2022-03-09-open-vm-tools-12.0.0-update.md
new file mode 100644
index 0000000000..55cd8de235
--- /dev/null
+++ b/sdk_container/src/third_party/coreos-overlay/changelog/updates/2022-03-09-open-vm-tools-12.0.0-update.md
@@ -0,0 +1 @@
+- open-vm-tools ([12.0.0](https://github.com/vmware/open-vm-tools/releases/tag/stable-12.0.0))
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-vmware/oem-vmware-11.3.5.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/oem-vmware/oem-vmware-12.0.0.ebuild
similarity index 100%
rename from sdk_container/src/third_party/coreos-overlay/coreos-base/oem-vmware/oem-vmware-11.3.5.ebuild
rename to sdk_container/src/third_party/coreos-overlay/coreos-base/oem-vmware/oem-vmware-12.0.0.ebuild