Two years after US aerospace manufacturer Pratt & Whitney announced the closure of Israeli factory Blades Technology (BTL) the situation on the ground has changed. 900 employees in the Nahariya factory had expected to be laid off. But a source close to the matter has told "Globes" that the BTL compressor blades plant will not be closed in 2025, after a decision taken by Pratt & Whitney.
BTL manufactures aircraft parts and equipment. In a letter sent two years ago by then CEO Igor Krapovinsky, who as far as is known is no longer in the job, he wrote, "Unfortunately, for a long time now the plant has been accumulating significant losses that are growing. The production processes that exist today at Blades Technology do not allow us to maintain productivity in a way that would be economically feasible, due to lower demand for compressor blades."
Employees were then informed that Pratt & Whitney had decided to end BTL’s compressor blade manufacturing operations in a process that would be completed in 2025, with most employees losing their jobs in 2024 and 2025. But due to internal considerations by Pratt & Whitney, closure of the factory has now been postponed by at least one year, even though in the past it was claimed that the technology used in Nahariya is outdated and of no further use.
The Histadrut General Federation of Labor, which represents BTL’s employees, said, "Due to our efforts to protect the workers, as well as an agreement we signed we signed with management last year, BTL will continue to operate in 2025."
The factory in Nahariya, which was originally called Iscar Blades, was founded by Israeli businessman Stef Wertheimer more than 50 years ago, following the embargo imposed on Israel by France after the Six Days War in 1967, which left Israel’s Mirage fighter jets without compressor blades. In the 1990s the factory began exporting to customers including Rolls Royce, General Electric and Pratt & Whitney, which acquired BTL in 2014 from the Wertheimer family, for an undisclosed sum. This was one year after the family completed the two-stage sale of business tools company Iscar to Warren Buffett for $6 billion.
But then in 2022 came Pratt & Whitney’s decision to close down the Israeli factory, after years in which there was no investment in upgrading the technology used by BTL. It remains unclear what has led to Pratt & Whitney’s decision to postpone closure of the factory although there has ostensibly been no change of heart over the fact that BTL’s operations are not economically feasible.
Six months ago the land on which the factory is built was sold by the Menivim REIT fund (TASE: MNRT), which had bought it from the Wertheimer family in 2020, to the Marathon REIT fund for NIS 155 million (compared with a book value of NIS 143 million).
Menivim explained the move as, "Due to the announcement by BTL to halt operations on the site." Marathon Fund, which specializes in improving properties and rezoning, is expected to apply for rezoning of the Nahariya lot from industrial use to residential and office use, hotels and commerce.
The deal is due to be closed four years from the date of signing, with an option to extend until BTL’s lease expires in June 2029. The lot extends over 55 dunams (11.25 acres) and has six buildings encompassing 22,000 square meters.
Published by Globes, Israel business news - en.globes.co.il - on January 2, 2025
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