Israel Military Industries (IMI) workers committee chairman Yitzhak Yehuda was rather surprised to hear about the decision to privatize the company. "Right up to the moment of this conversation," he said this afternoon, "no one has spoken with us about privatization. Not representatives of the Ministry of Finance or Defense, or the CEO or chairman of IMI."
Yehuda added, "We've been reading about these trends for the past two years, but this decision was dumped on us. The minister of finance and director general of the Government Companies Authority think that they can abuse our willingness to help, but we won't cooperate with any privatization measure.
"We're on the verge of signing the sale of two plants that we promised to sell two years ago. We were supposed to sign the agreements for the sale of the Magen Small Arms Division and Aircraft Systems Division today, or within a few days. Now the ministries suddenly make this announcement, taking us by surprise."
Yehuda said IMI's employees were not prepared to discuss privatization at this time, not even in exchange for high compensation, such as obtained by the employees of Israel Discount Bank (TASE: DSCT).
Yehuda said, "We've signed labor agreements that are valid through the end of 2006. A decision like the one reported for the sale of IMI to private parties, can only be discussed as part of the renewal of the labor agreements from 2006.
"The current labor agreement, signed in 2002, included laying off 700 employees, and an 11% wage cut totaling $80 million. The workers also agreed to cooperate in the closure or sale of four plants, and did so: Re'em Electronics Division, the Magen small arms plant, the small arms ammunition plant, and the Aircraft Systems Division in Haifa.
"Ministry of Defense director general Amos Yaron told me at out last meeting four months ago that he agreed the labor agreements should be honored. If they have now decided to privatize the company, they've violated the agreements."
When asked about what measures IMI's workers would take together with the Histadrut (General Federation of Labor in Israel), Yehuda replied, "I don’t want to make threats, and I don’t want to take any measures. We'll coordinate all our measures with the Histadrut and the union. The Histadrut also opposes privatizing IMI."
Published by Globes [online], Israel business news - www.globes.co.il - on February 14, 2005