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Finance Ministry Budgets Director Kobi Haber and the chairman of the professional division at the Histadrut labor federation, Ofer Eini, held intensive negotiations on the eve of Simhat Torah to solve the salary crisis at Israel Military Industries. The 2,900 IMI employees, including those at its Asot Ashkelot subsidiary, have yet to receive their September salaries, which were due more than two weeks ago.

IMI expects work disruptions to commence today until the issue is resolved.

The chairman of the employees' union, Yitzah Yehuda, has announced that he will refuse to sit down and negotiate as long as workers don't receive their paychecks. IMI's financial woes are also liable to cause delay in payment of October salaries.

Finance Ministry representatives countered that they would not approve allocations to IMI designated for salary payment as long as no real progress is made to implement the company's recovery plan. The freeze in this process is holding up the plan to privatize IMI, under which only two of 10 IMI factories have been sold.

The recovery plan worked out between the treasury and IMI management includes cutting the workforce by 500 people, some through early retirement and others through layoffs. Remaining employees would see their salaries cut by 8 percent.

IMI management blames Yehuda for "media manipulations and avoiding holding real negotiations on the company's future."