Na eind juli
Shir Hever nu in Haaretz over hoe de Israelische wapen-industrie weer goede zaken kan doen dankzij de Gaza-oorlog:
For Israeli arms makers, Gaza war is a cash cow
Factories worked
around the clock turning out munitions as the army tested their newest systems
against a real enemy. Now, they are expecting their battle-tested products will
win them new customers.
Shuki Sadeh, 11-8-2014
Far from the fighting in the Gaza Strip and the rocket attacks
that have pummeled Israel from south to the Sharon, some 300 employees of
Israel Military Industries in Nazareth haven’t left their assembly lines for a
minute in the past four weeks. They have been working in shifts, 24 hours a
day, to ensure a regular supply of 5.56 mm bullets to Israel Defense Forces
soldiers. Others have been hard at work turning out highly sophisticated
Kalanit and Hatzav tank shells for the Artillery Corps. The shells, which are
fired above the heads of militants armed with anti-tank weapons, exploding in
midair above them and releasing shrapnel, were both used on a massive scale for
the first time in Operation Protective Edge.
For some years now the state-owned IMI has had an image problem,
in part due to it enormous debts and management’s cozy ties with the union
locals and the political establishment. Next to the two other big
government-owned defense companies, Rafael Advanced Defense Systems and Israel
Aerospace Industries, until recently IMI looked decided dowdy, low-tech and
crony-ridden. Three months ago the state signed a recovery accord with IMI,
which offered a generous severance package of 1.3 million shekels ($370,000) to
any employee who took voluntary early retirement. Early next year the
government plans to hold a tender to privatize the company, and by early 2016
IMI should be in private hands.
Image aside, for several years IMI has very quietly been
developing more sophisticated products than bullets, rifles or hand grenades.
For example, its new, super-smart MPR-500 multipurpose rigid bomb, which is
designed to penetrate reinforced concrete structures and other difficult
targets, was first used operationally in Protective Edge. Today, back orders
for the bomb total 5.6 billion shekels.
IMI has built the foundations for a more successful business, and
in a market where violence erupts every few years a new round of violence
erupts, a dependable customer with the IDF and a classroom to test its
equipment.
“IMI cooperates with the IDF and the defense establishment in
adapting quick solutions for changing needs,” says UMI chairman Maj. Gen.
(res.) Udi Adam. “The defense industry is in a perpetual learning mode together
with the IDF and the Defense Ministry to examine the weapons systems that were
introduced for initial operational use in Operation Protective Edge, as well as
weapons systems that have been in operational use for a long time.”
One unit of IMI has already been privatized. Israel Weapon
Industries, which makes the Tavor assault rifle that is used today by most of
the infantry, is owned by Samy Katsav and is considered one of the world’s six
leading light-weapons manufactures. The SK Group comprises several companies
that supply the IDF.
Israel Shipyards, for example, makes missile boats and the Shaldag
patrol boat for the Israeli military, while Meprolight manufactures sights for
sniper rifles and night-vision equipment. As is the case for all companies in
the group, Meprolight’s most important customer is the IDF, even if 90% of the
company’s sales are to foreign countries,.
“After every campaign of the kind that is now taking place in Gaza,
we see an increase in the number of customers from abroad,” says Meprolight CEO
Eli Gold, adding, “Of course, we marketing abroad aggressively, but IDF
operations definitely affect marketing activity.”
Protective Edge’s marketing edge
“Battle-tested” is the best marketing slogan for defense
industries the world over, so for Israeli military manufactures Operation
Protective Edge has yielded a major competitive edge.
“For the defense industries this campaign is like drinking a very
strong energy drink — it simply gives them tremendous forward momentum,” says
Barbara Opall-Rome, Israel bureau chief for the U.S. magazine Defense News.
“Combat is like the highest seal of approval when it comes to the international
markets. What has proven itself in battle is much easier to sell. Immediately
after the operation, and perhaps even during, all kinds of delegations arrive
here from countries that appreciate Israel’s technological capabilities and are
interested in testing the new products.”
That was also the opinion of veteran military correspondent Amir
Rapaport, editor of Israel Defense, which covers the local defense industry.
“From a business point of view, the operation was an outstanding thing for the
defense industries,” he says. “There are two main reasons for that. First, the
cloud of budget cuts and project cancellations has been lifted. I believe that
after the operation, Israel’s defense budget will be increased and projects
that were frozen will be revived. Second, during the weeks of the war, new
products were introduced for the army’s use. The war is an opportunity to cut
red tape. Weapons systems that have long been under development suddenly became
operational during the course of the fighting.
Operation Protective Edge saw many weapons systems and other
technology that had been under development since the time of the Second Lebanon
War in 2006 enter the field of battle, for instance a unique communications
system designed to link air, sea and ground forces to the same infrastructure.
“It’s very difficult to defeat an enemy like Hamas, which is a guerrilla
organization, but in terms of technology the victory is quite clear,” says
Rapaport.
“The operation has a potential to promote defense exports, mainly
systems that have proven themselves,” says Maj. Gen. (res.) Danny Yatom, who
now deals in defense equipment and other business. “The industry will also
benefits as the [Israeli] defense establishment rebuilds inventories. Also, in
this war we saw that the army has new needs, especially in regards to tunnels.
In my opinion, there will now be an accelerated process of development for
that. There’s a financial incentive both for the developers and the
manufacturers.”
Yatom contends that the course of Operation Protective Edge shows
that future weapons systems must be designed to combat guerrilla organizations
rather than conventional armies. One example of the likely change is increased
demand for thermal-imaging night-vision equipment, rather than the Starlight
technology, based on available light, that is currently more common in the IDF.
“Thermal-imaging night-vision equipment is not affected by glow of bombs and by
urban lighting, so it makes identification easier,” he explains.
Gold confirms that the army is already thinking about this issue.
“During the war the IDF took an interest in this subject,” he says. “But still
it’s hard to estimate how things will turn out, because the IDF has yet to
formulate a view on the matter. The product itself is not new, and we’ve
already sold it to various armies worldwide.”
On the other hand, not everyone thinks that a successful campaign means an
increase in defense exports. Maj. Gen. (res.) Isaac Ben Yisrael, a former
director of the Defense Ministry’s Research and Development Directorate,
cautions that the success in Israel of a certain military system does not
necessarily carry over to foreign sales.
“Iron Dome, for example, is one of the main developments in this
war,” he says, “but there’s no demand for it in the world, because other
countries don’t face a similar threat. Besides, after the war most of the money
channeled into the defense budget will be used for restocking inventories, so
that the money that would normally be directed toward developing combat systems
will decrease.”
He says that despite the criticism being heard about the size of
the defense budget, Israel has no choice but to increase the army’s R&D
spending. That should be done by channeling profits from the government defense
industries into the IDF’s R&D units, he says, rather than handing them over
to the Finance Ministry, which funnels this money into the general state
budget.
