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The privatization process of Israel Military Industries (IMI) is dead in the water, with negotiations between the Finance Ministry and the IMI management on the one side, and the workers union and the Histadrut labor federation on the other, having reached a complete standstill. To date, only two of 10 IMI factories have been privatized - the Tirat Hacarmel aircraft plant and the Ramat Hasharon Magan plant, which manufactures light weapons.

IMI's 2,900 workers have yet to receive their September wages because of the company's financial crisis, which amounts to NIS 50 million; and the Israel Electric Corporation has suspended power supply to IMI Kiryat Shmona factory, which owes the electricity company millions of shekels.

Meanwhile, IMI employees are furious that union chairman Yitzhak Yehuda has taken off for a private vacation in Croatia, where he remains, despite the negotiations crisis and the lack of their paychecks. Associates of Yehuda commented that he went abroad after he was sure that workers would be paid on time on October 9, and also only after IMI retirees received their pension payments on the first of the month.

Senior sources at IMI and the Finance Ministry said that acting Finance Minister Ehud Olmert and Defense Minister Shaul Mofaz recently indicated readiness to inject a generous amount of assistance worth hundreds of millions of shekels into IMI. This move, they said, required cooperation on the part of the union and the Histadrut to reach an agreed upon recovery plan.

"However, union and Histadrut representatives showed up at negotiations without being prepared to discuss a substantial process for getting IMI out of its present crisis and stabilizing it," they said.

Peretz Mizrahi, union chair at the Asot Ashkelon plant, commented, "We've made it clear to treasury and Defense Ministry officials that we would agree to move forward in talks about IMI's recovery only after company workers receive their September salary. It's a disgrace that the state withholds workers' wages, particularly during the holiday season. The company chair, director-general, and treasury executives are personally responsible for this situation."