"Since the beginning of the year, 500 workers at factories producing components and systems for the Merkava tank have been fired," Merkava Production Industries Forum chairman Avraham Ben-David told "Globes" in response to the budget cut of hundreds of millions of shekels to the Merkava program. "The layoffs are due to changes at the factories in order to survive in the face of the budget cuts for the program in the IDF's five-year plan."
The Knesset Labor, Welfare and Health Committee today discussed the effect of the defense budget cut on the future production of the Merkava tank and Leopard (Namer) armored personnel carrier. Manufacturers Association of Israel CEO Amir Hayek told the committee that in the absence of a state budget, since the beginning of the year, 200 enterprises involved in the Merkava and Leopard programs have received no new orders from the Ministry of Defense.
Many of the enterprises are small and medium-sized businesses in the periphery, which the Manufacturers Association estimates employ 8,000 people. It warns that if the orders for components are not resumed, many of these enterprises will collapse in a way which will not allow in the future the recovery of the production know-how and skills accumulated over decades.
The IDF has not yet made a final decision about the future of the Merkava. The program cost an estimated NIS 700 million in 2012. Behind closed doors, senior officers say that the IDF understands the need to continue procurement of the Merkava Mark IV, which will replace obsolescent tanks in the coming years. They add, however, that one of the challenges that the IDF Planning Directorate has been dealing with in recent weeks has been the need to include the Merkva procurement program with the Teuza five-year plan. The Teuza plan is being drawn up in response to the multibillion shekel defense budget cut to supersede the Oz plan, which was prepared before the budget cut. The IDF is considering reducing six armored brigades in response to tight budgets in the coming years.
Published by Globes [online], Israel business news - www.globes-online.com - on June 24, 2013
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