In a major turnaround in the Ministry of Defense's export policy, after 30 years of a total ban on the export of the Merkava tank, "Defense News" reports that the ministry is now offering the latest version of the tank, the Merkava Mark IV, for sale to select customers. Each deal will be considered on its own merits.
"Defense News" says that the decision to export the Merkava is based on economic considerations, and is an effort to keep jobs in Israel. Official Israeli sources said that each export deal would be fully coordinated with the US, because the steel and other raw materials used in the tank, as well as the engine and certain US made components are all financed with US military aid. The Merkava's engine is a German design and manufactured in the US.
Ministry of Defense director general Udi Shani told "Defense News" that the new policy is a strategic decision, based on the need for additional revenue to meet Israel's military demands. He added that additional production of the Merkava Mark IV could extend the lifespan of the production line, ensuring employment.
Israel has generally kept out of the global market for main battle tanks, mainly in order to keep critical technologies for Israel's exclusive use. Israel also did not want to annoy tank exporters - the US, Russia, and European countries, which dominate the tank market. Instead, Israel has exported upgrade kits for various types of tanks.
Although Shani did not explicitly say so, other Israeli sources told "Defense News" that the decision to export the Merkava was in large part due to the Ministry of Defense's effort to calm local manufacturers who fear the loss of work for the ministry following the expected transfer to the US of production of the Namer (Leopard) heavy armored personnel carrier (APC), which uses the Merkava chassis.
The companies - BAE Systems plc (LSE: BA), and General Dynamics Corporation (NYSE: GD), and Textron Inc. (NYSE: TXT) - are bidding in the tender to manufacture components of the Leopard in the US. The tender is worth hundreds of millions of dollars, as part of a joint manufacturing contract. Israeli manufacturers fear that all production will ultimately end up with the winning bidder.
Published by Globes [online], Israel business news - www.globes-online.com - on June 10, 2010
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