Israel Railways CEO ousted amid crisis

Shahar Ayalon Photo: Eyal Izhar

The board of directors dismissed Shahar Ayalon because of overcrowding on trains, malfunctions on the new Jerusalem line, and the company's heavy losses.

Israel Railways chairperson Dan Harel and CEO Shahar Ayalon talked today and jointly agreed that Ayalon would leave the company three months from now, Israel Railways announced. It was also decided that an appointments committee would be formed during this period to make an orderly selection of a new CEO. Israel Railways' board of directors unanimously approved the agreement.

In a joint announcement, Harel and Ayalon said, "As two people who have served Israel and its people for all of their adult lives, we found it necessary to sit together in order to solve the crisis that has emerged. We regard the agreement that we reached as fulfillment of our shared responsibility for the good and needs of Israel Railways as an important national project, especially at the present time."

The agreement ends the crisis that began almost two weeks ago with an attempt to dismiss Ayalon as CEO. The hearing in the matter was postponed a number of times at Ayalon's request, and was scheduled to take place on Monday at a special board of directors meeting. Following Ayalon's attempt to add directors representing the employees to the meeting, however, he apparently decided that the effort was in vain and gave up. Two of Israel Railways' 10 directors are representatives of the workers who openly support Ayalon.

The dispute about Ayalon arose because of a whole series of failures at Israel Railways: overcrowded carriages, repeated malfunctions on the high-speed railway line to Jerusalem, and huge losses by the company. These failures led Harel to summon Ayalon to a caustic talk in which Ayalon was told that if he did not resign, the matter would be brought up before the board of directors for a vote.

Ayalon was determined to remain in his position and did not resign, and the question was brought to the board of directors for a vote, which unanimously decided that Ayalon would have to resign. The decisive consideration for the board of directors was the company's dismal financial plight in the past year.

Ayalon was not invited to this meeting, leading him among other things to send an angry letter to members of the board of directors asking them not to cooperate with Harel in firing Ayalon and not to attend the meeting. Ayalon stated in his letter, sent through his lawyer, that he was forbidden to grant interviews, and the board members had allegedly been forbidden to meet with him. Ayalon compared the events to "repressive regimes," and referred to his dismissal as "underhanded" and "confusion" on Harel's part.

Shahar Ayalon Photo: Eyal Izhar
Shahar Ayalon Photo: Eyal Izhar
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