U.S. Computer Firm Negotiating to Establish Plants in Israel

Intensive negotiations are under way to persuade Atari, the U.S.-based personal computer and videogames giant, to establish plants in Israel that would create some 3,000 jobs and exports amounting eventually to a half-billion dollars a year.

Atari, headquartered in Sunnyvale, Calif., and one of the world’s leaders in computer software, had planned to open a plant in eastern Asia.

But Israel’s minister of trade and industry, Moshe Nissim, during a recent visit to the United States, convinced Atari’s majority stockholder, American Jewish businessman Jack Tramiel, to consider Israel.

Government officials said Atari’s investment in Israel was conditional on the establishment of several subsidiary factories here to manufacture parts for a main Atari plant, such as printed circuitry, monitors and software.

According to the ministry, the cost of building the new factories or making the necessary improvements to existing ones is between $75 million and $100 million.

Israel is offering to bear about half the cost, with the balance coming from private investors enlisted by Tramiel.

The central Atari plant would benefit from various inducements Israel offers foreign investors. They include a grant of up to 38 percent of the investment if the factory is established in a development town like Kiryat Shmona.

Loans of up to 66 percent of the initial investment would be available if Atari opted for the new program of government-guaranteed loans.

The Atari plant initially would employ 600 workers, many of them engineers. Within five years, the work force would grow to 1,000. Computer and program sales are projected at $150 million a year.

The potential exports from the subsidiary plants employing about 2,000 workers is $300 million during the first years of operation, eventually reaching $500 million.