The Ministry of Industry, Trade and Labor's Industrial Cooperation Authority has signed a reciprocal procurements agreement with General Dynamics Corporation (NYSE:GD) unit General Dynamics Land Systems, which last year won a contract to build Israel's Leopard armored personnel carrier (APC) developed by the Ministry of Defense's Tank Development Administration.
The Leopard is considered one of the most advanced APCs in the world. It integrates elements ensuring a high level of armor based on lessons learned in recent conflicts, including the 2006 Second Lebanon War. The Ministry of Defense recently decided that the IDF will procure hundreds of Leopards, all of which will be equipped with the Trophy active protection system built by Rafael Advanced Defense Systems Ltd..
The agreement to transfer the Leopard's production to General Dynamics includes a clause whereby Israel will import the APC's components and assemble it at the Tank Development Administration's facility in central Israel. Israel will purchase the components using US military aid, which will enable the Tank Development Administration to increase production of the Merkava Mark IV tank, and direct larger budgets to procurement of the Leopard.
During the negotiations between the Ministry of Defense and General Dynamics, there was criticism by Israeli manufacturers who claimed that the transfer of production would seriously harm scores of Israeli companies that manufacture the Leopard's components. 60 companies in the armored fighting vehicles industry were chief contractors and had contracts with many subcontractors.
Published by Globes [online], Israel business news - www.globes-online.com - on April 13, 2011
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