US manufacturer Pratt & Whitney feels threatened by the outline plan being promoted by the Northern District Planning and Building Commission for the northern industrial zone in Nahariya. According to the plan, Nahariya industrial zone will be rezoned for commercial, residential construction, and tourism, thereby changing the entire area in the coming years.
Pratt & Whitney currently owns Blades Technology (formerly Iscar Blades), after acquiring the company in 2014 from industrialist Stef Wertheimer for hundreds of millions of shekels. The company also has another airplane blades manufacturing business in the Tefen industrial zone. The Nahariya plant employs 560 workers, and the Tefen plant 600 workers.
In view of the disputed outline plan, Pratt & Whitney has warned that it will halt its investments in the two plants, including consideration of moving its business from northern Israel to other countries. Advocates Dror Gidron and Yochai Shechter from the Ephraim Abramson & Co. law firm are representing Pratt & Whitney in Israel. They assert that approval of the new outline plan will prevent Pratt & Whitney from expanding its business in the northern industrial zone in Nahariya in line with its multi-year investment plan.
"Pratt & Whitney is an international company that plans its investments for years in advance, and given this outline plan, it stands to face a problem if it wishes to expand its business in the Nahariya plant," Shechter told "Globes" today. "Every few years, the company develops a new engine or product, and in order to produce it, it needs suitable new production infrastructure. One production item, such as a suitable press, can be as big as an entire building. In view of the rezoning of land under the outline plan in question, this cannot be done, and Pratt & Whitney is asking especially difficult questions about its future in Israel."
"Pratt & Whitney has other alternatives in the world"
According to Gidron, "Besides preventing possible expansion by companies in the existing industrial zone, they will be operating in a place subject to environmental regulation, such as noise pollution, etc. because according to the outline plan, the area is zoned for residential construction, tourism, and commerce. A Blades Technology plant works 24 hours a day, and extensive restrictions will apply to it. Pratt & Whitney have alternatives; there are other countries in the world. It will go to India or one of the European countries, and an entire industrial sector will vanish from Israel."
The detailed objection submitted by Gidron and Shechter to the District Planning and Building Commission a year ago was rejected. "The decision on the matter is scheduled to take place soon," Shechter says. "Pratt & Whitney management is following the matter with great interest, because the decision can have a major effect on the future of its business in Israel, after having invested so much here. Such a decision will affect not only the plant in the Nahariya industrial zone, but also the plant in Tefen, to which products are sent from Nahariya for finishing and competion."
Pratt & Whitney's exports from Israel in 2014 totaled $170 million. Considered the global leader in airplane engines, the company also produces the engine for the F-35 stealth warplane, which the Israeli air force is also scheduled to receive in six months. The company's yearly turnover is estimate at $14 billion.
"In its two factories in Nahariya and Tefan, the company has over 1,150 direct employees, and is responsible for the indirect employment of many other workers in the area. Denying the company the possibility of continue to operate in its existing facility in Nahariya will lead the company to move out of Israel to a country where total production costs are in any case substantially lower," Shechter and Gidron declared.
"The Nahariya municipality is opposed"
The Nahariya municipality also objects to the new outline plan. Given its progress in the District Planning and Building Commission, the municipality expressed its opposition to the rezoning the industrial zone. "It is very difficult to understand the logic behind such a plan, which is liable to deal a severe blow to industry. The city does not lack land for construction, and its hotels are in any case not fully occupied. In the end, instead of development, the city will find itself facing severe unemployment," Pratt & Whitney and Blade Technology's representatives said today.
"In any case, even if the outline plan is not approved, Blade Technology does not have enough space to expand, except in the direction of the beach. Does it seem logical to you that anybody will approve construction in the direction of the beach for the plant?", Nahariya municipality planning department manager Ronny Levy told "Globes." "The Nahariya municipality joined the opponents of this plan in order to express solidarity with the various plants operating in the northern industrial zone, given the new additional uses for the land. Nevertheless, other enterprises that want to expand can do so , and none of the industrialists operating in this area has been affected so far, and in my opinion, will not be affected."
The Nahariya municipality stated in response, "The Nahariya municipality and Mayor Jackie Sabag have submitted and expressed objections to the District Planning and Building Commission on the grounds that the plan will have a negative impact on industry, or cause a drop in activity by enterprises in Nahariya. At the same time, it should be noted that the plan does not entail the closing of the industrial zone, but only additional uses for the land."
Published by Globes [online], Israel business news - www.globes-online.com - on July 3, 2016
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