Talks between Israel Aircraft Industries (IAI) and French defense industry heads have hit a snag. The two parties were negotiating an agreement for the transfer of know-how to the French defense industries about the manufacture of unmanned aerial vehicles (UAVs). Israeli sources close to the negotiations said it was reasonable to assume that the agreement would not be signed this week, as hoped, at the Eurosatory - the international exhibition for land and land-air defense. Eurosatory ends tomorrow.
IAI and the Ministry of Defense hoped to close the prolonged negotiation process with French defense manufacturers Dassault Aviation, Sagem (Paris:SAGU) and European Aeronautic Defense and Space Company EADS NV (EADS), for the transfer of know-how and technology in manufacturing the strategic UAV model called Eagle, based on Israel Aircraft Industries' (IAI) Heron/Eagle (Mahats) long-endurance medium-altitude UAV. The contract means $200 million revenue for IAI on the manufacture and sale of the UAVs.
The agreement now being formulated has commercial significance for IAI, but also has national and political importance, as this would be Israel's biggest defense contract with France since the latter's trade embargo went into effect after the 1967 Six Day War. The contract's most important aspect is in bringing other European manufacturers into the Israeli marketing and sales network, and eliminating aggressive competition against them.
However, senior Israeli sources said today, "The French have still not made a final decision on signing the deal, and our wish to hold the signing during will apparently not come true. There are very significant matters that are still open, in terms of business and in terms of other things".
Published by Globes [online] - www.globes.co.il - on Wednesday, June 16, 2004