Government needs to implement IMI and Rafael merger plan

The Israeli government is the sole shareholder of the country’s biggest aerospace and defence industries.

This fact is not reflected in the attitude of the respective ministers to the companies which feel deserted. “We are orphans,” a source in one of the companies said on 14 July.

The consolidation process that changed the face of the aerospace and defence industry in the US and Europe in the past 15 years, but this has stopped on the Israeli border.

However, even when there were signs something was going to happen to remedy the situation, it was a false feeling.

Earlier this year, the government decided to merge Israel Military Industries (IMI) with Rafael.

The result would have been the development of very advanced weapon systems based on the combined know-how of both companies in developing special explosives and warheads.

However, the Israeli government does not seem to have moved to implement its decision after efforts to privatise IMI met with opposition, mainly from the workers’ union.

IMI has been in financial problems in spite of a growth in sales and an impressive backlog. Problems stem from a retirement programme that puts a heavy burden on the company.

With the growing competition in the export market, the merger plan looks right but the impotency of the ministers to implement their own decisions has reached a new peak – or rather the lowest possible point.

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