Dror Marom 01.11.2001 15:55
Israel's decision not to actively participate in the JSF (F-35) future US fighter plane project seriously affected the chances of Israeli defense industries to supply products for these planes, which will be built by Lockheed-Martin. Israel's Ministry of Defense, Air Force, and defense industries decided in mid-1999 to be classed as an "observer" in the project, not as an "active partner". The reason was money - the fee for expanded participation in the project was $10 million, while participation as an observer cost only $2 million. Israel's payment to the US administration was shared by the Ministry of Defense, the Air Force, and the defense industries.
The lower category gave Israeli concerns the right to receive general information about the project and participate in some of the discussions. The active partners received the right to participate in all the project discussions, obtain the technical information, and be involved in development.
In contrast to the Israeli industries, aerospace industries in countries classed as active partners, such as Britain and other European countries, were able to propose that their systems be included in the plane. International subcontractors will supply products worth billions of dollars for the project.
With the exception of Elbit Systems (Nasdaq: ESLTF), which concluded a deal for up to $200 million with Lockheed-Martin over a year ago to supply advanced helmet systems for JSF pilots, no Israeli company is expected to supply products for the next generation fighters. Companies like Israel Aircraft Industries (IAI), Israel Military Industries (IMI), Rada Electronic Industries (Nasdaq: RADIF), and Rafael (Israel Armament Development Authority) currently supply products for combat planes manufactured by Boeing and Lockheed-Martin.
The JSF will replace the F-16 and is likely to become the most widely sold fighter of all time, as the F-16 has been. Before Lockheed-Martin won the huge tender, Boeing, which also competed, did not include a single Israeli company on the list of 25 international companies chosen to participate in its plan to develop the plane. "Israel has probably missed the JSF boat," industry sources claimed.
As published yesterday, the chances that Rafael's Python-4 missile will be included in US procurement plans have also been harmed, due to the 18-month delay in getting Ministry of Defense approval for manufacture of the missile by Pegasus, a company owned jointly by Rafael and Lockheed-Martin.
Published by Israel's Business Arena on November 1, 2001