ARIE EGOZI / TEL AVIV
Scepticism is rife in Israel over whether the government's decision last week to privatise national carrier El Al can succeed in the face of union objections.
On 8 July, the government again approved plans to sell the entire airline, following a promise in 1998 to transfer 49% into private hands. The first flotation will consist of 49% of the shares, with the rest to be sold later.
Ephraim Sneh, the Israeli minister of transport, says that the process will begin in the second quarter of next year. But the union representing El Al employees says it will not co-operate unless $130 million taken in the past from the workers' compensation fund is returned. The Israeli treasury says that the amount is only $90 million and had not responded to the union's demand last week.
"Without the co-operation of the workers, the privatisation effort will fail," a senior airline source says.
Israeli prime minister Ariel Sharon, who is also head of the government privatisation committee, was against any commitment to secure the workers' compensation funds. He claims that this could become a precedent for other state companies that are on the privatisation list.
Several large Israeli companies, including Israel Aircraft Industries, are state-owned and many view El Al as a test case for a larger privatisation programme.
Israel Aircraft Industries (IAI) is modifying the structure of its Electronics Group. It will be split into two divisions: Missile & Space Systems Group, headed by Itzhak Nissan; and Elta Intelligence, Radar & AEW Group (Elta Systems), led by Israel Livnat. Both Nissan and Livnat have been promoted to corporate vice-presidents.
The move follows the expansion of business activity at the Electronics Group. IAI's Missile & Space Systems Group will comprise the MLM, TAMAM, Space, Missile Systems and Technologies & Manufacturing divisions.
Source: Flight International
