New Restrictions on US Aid Is Driving Israeli Companies to Seek American Partners (excerpt)
(Source: Breaking Defense; posted June 24, 2019)
By Arie Egozi
TEL AVIV --- US-based aerospace titan Lockheed Martin is teaming up with Israeli partners seeking US business and with Europeans seeking Israeli contracts. It’s part of a wider trend that has some Israeli observers fretting over the “Americanization” of their proud defense industry.

Israel’s current political crisis is compounding the problem, with the country headed into its second general election in five months after embattled Prime Minister Benjamin Netanyahu failed to form a coalition. But a long-term driver is a change the US made to its Foreign Military Financing (FMF) loans to Israel, requiring Tel Aviv to spend an ever-growing share of FMF funds — eventually, [by] 2028, 100 percent — on US contractors.

With the Israeli defense budget long dependent on US subsidies, the rule change pushes Tel Aviv to favor US firms and US-led teams for contracts. That, Israel Aerospace Industries (IAI) says, is why the Israeli government won’t even give it a chance to compete for a new Israeli Air Force tanker.

Even Israeli exports are affected by the Americanization trend, with Rafael teaming with Lockheed on its SPICE and Spike smart weapons — and IAI’s own ELTA subsidiary is joining forces with Lockheed on radar. (end of excerpt)


Click here for the full story, on the Breaking Defense website.

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