"Defense News" reports that Ministry of Defense officials are encouraging Israel Military Industries (IMI) to move production of the new Tavor assault rifle to the US, as a joint venture with a US company. The reason is to enable the IDF to purchase the rifle with US military aid.
"Defense News" states that almost 70% of development and production for the IDF's ground forces modernization - the Hunter digitalization program - is being carried out in the US, due to the structure of US military aid and the shortage of shekels.
GOC Army Headquarters Maj.-Gen. Yiftah Ron Tal told "Defense News" that the $250 million program was "paramount priority" and the main thrust of the IDF's operational concept and modernization efforts. He said moving the program was "heartbreaking but necessary."
"There are things we can do in Israel and should not be done in the US from our perspective," said Ministry of Defense director general Amos Yaron. "There are things we can do in Israel, but are forced to do in the US, due to the color of money."
Elbit Systems (Nasdaq:ESLT; TASE:ESLT) is the main contractor for the IDF Hunter program. Elbit Systems president and CEO Joseph Ackerman said a major part of development work and production for the program would be carried out by its Texas-based subsidiary EFW.
"The Hunter is of vital importance and is mostly financed from US military aid," said Ackerman. "There is no way to evade the fact that if the Ministry of Defense and IDF have urgent needs, they will presumably fulfill them through the military aid process."
Published by Globes [online] - www.globes.co.il - on July 13, 2004