The Histadrut (General Federation of Labor in Israel) was quick to announce yesterday that it would stand by the nearly one thousand workers at the Blades Technology Ltd. jet turbine blades factory in Nahariya in northern Israel, which, as first reported by "Globes", will start to be shut down in 2024. Alongside the declaration of a labor dispute, the Histadrut declared that "the aim is that the company should find a buyer to run the factory as a going concern."
The closure of the factory is a further sign of the global crisis in the aviation industry, which makes the Histadrut’s response odd to say the least. The mission of finding a buyer is almost impossible. Blades Technology is in a highly specialized field in a small niche in the aviation world. There are very few competitors, and it is highly unlikely that a potential buyer can be found for such a business within the relevant period of time.
US-based Pratt & Whitney, which bought the factory in 2014, manufactures and maintains jet and turbo-prop engines for military and civilian aircraft, and rocket engines for the space industry.
The company produces parts for giant aircraft manufacturers Boeing, Airbus, and Lockheed Martin, and controls 26% of the market for civilian aircraft engines. Its advantage is chiefly in engines for narrow-bodied aircraft such as the Airbus 320.
The Covid-19 pandemic and the rapid exit from it considerably worsened the manpower shortage reported by many airlines. As a result of the shortage, chiefly in air crew, the airlines cut flights, suspended routes, and canceled orders for new planes. The global supply chain problems, still not completely solved, has also had an effect on the aviation and aircraft manufacturing industry, and the war between Russia and Ukraine has hit the supply of special metals produced in those countries.
In 2018, a peak year for aircraft manufacture and delivery, a total of 1,714 new planes were delivered to the airlines (806 Boeing, 813 Airbus, the rest Bombardier, Embraer and others). Two years later, in 2020, the number of new plane deliveries sank to just 821 (157 Boeing, 566 Airbus).
Despite the rise in orders in 2021 and 2022, aviation industry analysts predict that Boeing, Airbus, and Embraer (which also uses Pratt & Whiney engines) will return to former production levels only at the end of 2024. More pessimistic forecasts speak of 2026.
Thus a crisis that began in 2019 and hit some of the largest and most important companies in aviation was passed on to their engine manufacturers, and from there to their sub-contractors, and ultimately to the individual worker in Nahariya having to cope with the closure of his or her workplace.
Published by Globes, Israel business news - en.globes.co.il - on December 5, 2022.
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