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Some 2,000 Workers to Be Dismissed in Wake of Cancellation of Lavi

Senior defense sources said Tuesday that no more than 1,500-2,000 Israel Aircraft Industries (IAI) employes will be dismissed as a result of the cancellation of the Lavi warplane project.

The sources, according to Maariv, said that IAI in any event had intended to soon dismiss about 1,500 employes as part of efficiency measures. Also, any IAI employe who is fired because the Lavi project has been scrapped will receive an average compensation of $55,000, according to Defense Ministry data that has been conveyed to the Ministries of Finance and Economy and Planning. Yediot Ahronot reported that about 500 employees of IAI’s engineering division who saw the writing on the wall are currently conducting negotiations with South African firms interested in their skills. These companies have offered the engineers monthly wages of about $7,000, most of which is to be deposited into Swiss bank accounts.

According to Maariv, IAI employs 22,392 persons, including 4,007 engineers, 4,558 technical engineers, 8,142 production workers, and the rest–no fewer than 5,685–are services and administration employes, or 25 percent of the IAI work force.

The paper said there is a feeling in some circles that this ratio is too high, and that IAI, which is operating at a loss, can make personnel cuts. In fact, IAI management had intended to dismiss 1,500 workers without any connection to the Lavi project.

UNEMPLOYMENT NOT EXPECTED TO INCREASE

The Lavi project itself employed 5,085 persons, of whom only 1,592 were engineers and scientists. The rest were 1,230 technical engineers, 1,495 production workers and no fewer than 758 service employes.

Maariv commented that according to Defense Ministry figures, the alternatives to the Lavi are supposed to provide work for 3,700 persons in 1988 and 5,000 in 1989.

The conclusion is that unemployment will not grow because of the cancellation of the project. Normal unemployment will be generated, and there will be a need to retrain workers, who would in any case have undergone retraining in another two or three years.

According to Defense Ministry figures, 7,090 persons have been dismissed from defense industries in the past two years, inter alia because the Ministry’s budget was cut in other areas beside the Lavi. Since April 1985, 1,910 employes have been dismissed from Israel military industries, 1,300 from IAI, 1,200 from Tadiran, 620 from Beit Shemesh Engines, 500 from Rafael (armament development authority), 450 from Ordan, 300 from Ashot Ashkelon, 250 from Elop, 220 from Elbit, 180 from Ilisra, and 160 from Cyclone.

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