Arie Egozi/TEL AVIV
Plans to form a joint marketing company to handle the sale of early warning systems offered by Israel's Elta and Elisra have failed because of fierce opposition from trade unions at state-owned Israel Aircraft Industries (IAI), Elta's parent.
Elisra's owner, Koor - Israel's largest industrial concern - has resumed talks with avionics manufacturer Elbit Systems about forming an alternative joint marketing company. The failed Elta/Elisra effort is seen by analysts as a setback to the restructuring of Israel's defence industry, although the completion of a merger between Elbit and electro-optics specialist Elop will boost consolidation.
Following the merger, effective from 1 January, the pair will take the Elbit name, with Elop becoming a fully owned subsidiary. Elbit specialises in advanced avionics and helmet-mounted sights and has entered the fixed-wing and helicopter upgrade markets. Its 1999 turnover is estimated at $440 million. Elop, which makes aerial photography systems, stabilised observation systems, laser designators and head-up display systems, had sales of $300 million last year.
The merged companies have subsidiaries in the USA - Elbit's EFW and Elop's Kollsman - which will become part of the new company. The merger will create a major privately owned concern, increasing the fierce competition between Elbit and IAI.
Israeli armaments company Rafael has reduced its losses, meanwhile, and says it will make a profit this year if government plans to change its status are implemented. The business - part of the defence ministry - will report a loss of $40 million for 1999, compared with an $80 million loss the previous year. Its sales totalled $490 million, and orders of $570 million took its backlog to around $1 billion.
Plans to change Rafael's status, proposed for the past five years, will be implemented on 1 April, says Prime Minister Ehud Barak.
Source: Flight International
