Defense Ministry officials assert that meetings here this week with a United States Defense Department official who is responsible for the American cost estimates on the Lavi fighter jet, the prototype of which is due to take to the air for its maiden test flight later this year, have been a dismal failure.
The officials said that unless the current 46 percent difference between the cost estimates of the two countries is appreciably narrowed, American opposition to construction of the Israeli plane, to be built with massive U.S. financial assistance, may spread from the Pentagon to other sectors of the U.S. Administration.
The U.S. official here, Dov Zakheim, Assistant Deputy Secretary of Defense, met with Defense Minister Yitzhak Rabin on Monday and has since been meeting with other Ministry officials. Zakheim claimed that his figures show that the fly-away cost of the aircraft would be $22 million, while Israeli estimates put the figure at between $13 and $15.5 million.
COST DISCREPANCIES
The higher figure means that Israel would be able to produce far fewer planes for the funds budgeted by the U.S. in production aid than was originally estimated, and would make continuation of the program not worthwhile. The different cost figures are due to discrepancies between labor cost estimates and the price of the engine.
Zakheim said he cannot accept the Israeli contention that labor costs in Israel are based on an engineer’s salary of $30 an hour, insisting that the figure should be between $45 and $48 an hour. “What engineer would be willing to work for only 30 an hour?” he has been quoted as saying. There are 100,000 labor hours scheduled for the production of each plane, making the overall difference significant.
As for the engine, Zakheim insists that the Pratt and Whitney’s average price will be $4.5 million per unit, while Israel, backed by signed contracts on an initial procurement order for the engines, says that the cost will be three million dollars each.
During his visit to Israel, Zakheim is also checking into the economic implications of Israel’s building three submarines in Haifa starting in 1988, and the building of Israeli Saar V missile boats in the U.S.
Israel is interested in purchasing for its Navy three conventionally-powered submarines which are no longer made in the U.S., where all submarine construction is of nuclear-powered underwater vessels.
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