Producing APC in US would cost 2000 jobs in Israel

Producing APC in US would cost 2000 jobs in Israel
Manufacturers Association: Production lines in dozens of plants around
Israel would be closed if the Eitan were produced in the US.
Yuval Azulai Globes 7 Dec, 2016 20:44
http://www.globes.co.il/en/article-producing-apc-in-us-would-cost-2000-jobs-1001165612

Manufacturers are severely criticizing the plan to outsource future
production of the Eitan armored personnel carrier (APC) to the US in order
to buy it with US defense aid. At the beginning of the week, “Globes”
revealed that the IDF ground forces and the Ministry of Defense were
considering importing the new APC from the US, while keeping installation of
the systems used in it in Israel.

“Israel has to preserve its technological, security, and employment
interests, and manufacture the Eitan APC in Israel,” Manufacturers
Association of Israel President Shraga Brosh told “Globes.” Manufacturers
Association sources said that the project for developing and producing the
future wheeled APC slated for use by the IDF ground forces could put NIS 2
billion in to the economy, provide work for 200 industrial companies, and
accommodate 2,000 jobs, mainly in outlying areas.

Defense manufacturers warned that Israeli armored fighting vehicles
industries had already suffered a serious blow in 2010, when the Ministry of
Defense decided to transfer production of the Namer APC to the US, leading
to the loss of 2,000 jobs. “It appears that the government is about to make
the same destructive mistake by considering the removal of another flagship
labor, technology, and know-how-intensive project from Israel to the US. We
must not allow them to do this,” a manufacturer involved in the matter said.

Manufacturers Association of Israel Merkava tank industries forum chairman
Avraham Bar David said, “Transferring production of the APC to the US will
lead to the closing or constriction of production lines in dozens of plants
around Israel, have a negative impact on exports of systems used in the
Eitan, and damage the civilian sources of know-how and development based on
the technologies used in the Eitan. I call on the Ministry of Defense to
reconsider its decisions on the matter, and to leave production and
development of the Eitan in Israel.”

The Eitan is a wheeled APC whose development began following the lessons
learned in Operation Protective Edge two years ago. It is slated to replace
outmoded unprotected APCs still used by IDF infantry brigades. Development
of the Eitan was revealed four months ago. It is still being tested under
various battle scenarios, and a decision about its procurement will be made
only when these tests are completed.

The model under which the Ministry of Defense is considering outsourcing
most of the Eitan’s production to the US and its procurement with the use of
US aid money has already been used for the Namer APC. 60% of the production
work on these APCs is done by US companies, and the finishing is done in
Israel. In the case of the Eitan, consideration is being given to having a
larger proportion of the work done by US companies, at the expense of the
work done by Israeli industries.

“The state has to learn from the US itself, which is having its taxpayers’
money used for the development of local industry,” Brosh said. “The Indian
government has also set a policy of transferring production and know-how to
the country. Instead of regarding the development of local industry as a
strategic goal, as other countries do, we are transferring know-how and
business opportunities to foreign countries because of short-term
considerations.”

Defense sources told “Globes” that the armored fighting vehicles industry in
Israel had always been based on the development and production of the
Merkava tank, which will remain in Israel. This program is estimated at NIS
1 billion a year. The sources asserted that as long as production of the
Merkava remains in Israel, the hundreds of industries involved in it would
not be affected.

Commenting on the possibility of outsourcing production of the Eitan outside
Israel, the Ministry of Defense said at the beginning of the week, “The
Eitan is still in the development stages, and has not yet been approved by
the IDF for procurement and mass production. If and when decisions are taken
to produce it, and in what volume, the Ministry of Defense Merkava Tank
Administration, which regards the involvement of Israeli industries in the
Merkava project as a strategic asset, will take steps to ensure the share of
Israeli industries in the project, as it has done up until now. We emphasize
that after the project is approved, production of the Eitan will take place
simultaneously with production of the Merkava and Namer. In view of the
increased procurement of armored fighting vehicles following Operation
Protective Edge, the Israeli defense industries’ share on all these projects
will increase, not decrease.”

Published by Globes [online], Israel business news – www.globes-online.com -
on December 7, 2016