"The Israel Military Industries Ltd. (IMI) board of directors instructed the company's management to implement the necessary measures for the laying off of 500 company employee and bring about a termination of their employees as soon as possible." That was the statement, but don’t make us laugh.
Not even IMI's board of directors believes their own announcement made yesterday. Why? First, because a similar announcement was made back in January, and then again in October.
However, the more substantive reason for disbelief is that IMI's board of directors knows that it cannot fire employees of a government company without the consent of the workers' committee and the Histadrut (General Federation of Labor in Israel). The board cannot even fire a fly, let alone 500 employees. Its so easy, but to fill airspace with spin about layoffs is apparently much easier - witness the headlines in yesterday's and today's media.
What is the purpose of the spin? A source in IMI's managed admitted to "Globes", "Obviously, the board's intention is to tell the ministers to meet and make a decision."
The ministers in question are Minister of Defense Ehud Barak and Minister of Finance Yuval Steinitz. IMI's workers' committee and the Histadrut have already agreed to the privatization of the company, they have even agreed to the laying off of 950 senior employees.
The argument is really all about money. The Histadrut is demanding a NIS 700 million safety net for the employees, which will be deposited with a trustee to ensure the terms of future retirement of employees who will remain at IMI after its privatization. The Ministry of Finance is offering NIS 400 million. In other words, a gap of NIS 300 million is separating the parties.
What is to be done? Announcing layoffs might pressure the ministers to get their act together. IMI's board of directors is pressing the system, because the system is pressing it.
The interim conclusion is that the officials threaten, the ministers stay silent, the board announces virtual layoffs, as the company rots and any potential buyer offers a ludicrous price for it. Forgive us our cynicism, but maybe that is the objective?
Published by Globes [online], Israel business news - www.globes-online.com - on December 16, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010