Damaging the economic security of Israel Aerospace Industries is damaging the security of the state
The delay in payments by the Ministry of Finance to Israel Aerospace Industries threatens not only the company's ability to continue its work during this sensitive period, but also compromises the security of Israel's citizens.
This week, Israel Aerospace Industries published impressive data for the second quarter. The company is on the rise, with production lines operating at full capacity, sales reaching 2.2 billion dollars, net profit jumping 40% to 449 million dollars for the half-year, and an order backlog of 35 billion dollars. These results are the work of 16,000 employees working around the clock to ensure that Israeli citizens have protection and that our pilots and soldiers have the most advanced means to face the enemy.
Yet, despite a fantastic quarter, the company's current cash flow is negative. The reason is simple: the state, which is both the owner of Israel Aerospace Industries and its client, has not paid 800 million dollars for products supplied to the IDF. The Ministry of Finance is engaged in power struggles with the Ministry of Defense, resulting in a lack of payments. In the business world, cash flow is the oxygen of an organization. A situation where the main client freezes payments while the Ministry of Finance "flexes its muscles" at the expense of a commercial company inevitably leads to damage to the state's security.
Israel Aerospace Industries has effectively become the bank of the Ministry of Defense, without charging interest or having the ability to stop credit. This is an unhealthy situation. The state not only delays payments but also creates difficulties regarding employee compensation due to outdated restrictions by the Wage Commissioner. In an environment of fierce competition for talent with giants like Nvidia, the company must be strong enough to recruit the best developers for Arrow systems and satellites. When the state does not pay on time, it undermines the company's ability to compete for talent, which directly harms national security.
The last war proved that we cannot depend on foreign weaponry. Warehouses were emptied, and we waited for approvals for components that save soldiers' lives. The solution is to produce locally, "blue and white," which requires excellent employees who will not join without competitive salaries and economic stability. As part of the company's IPO process, investors are looking for stability, and a company that is owed nearly a billion dollars by its client is seen as being in trouble.
My appeal to the Prime Minister, the Minister of Defense, the Minister of Finance, and the head of the Government Companies Authority: pay your debt to Israel Aerospace Industries. This is not a favor; it is payment for the security of the State of Israel. The 16,000 IAI employees produce the Arrow, radars, satellites, and UAVs. They are not asking for charity; they are demanding that the state pay its bills on time. A state without thriving defense industries is a state without security. When the Ministry of Finance and the Ministry of Defense continue their power struggles, draining Israel Aerospace Industries, the only ones smiling are the Iranians and the Turks. Experience has proven: you do not gamble with Israel's security.
Yair Katz is the secretary of the Israel Aerospace Industries Workers' Organization.
