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Finance Minister Benjamin Netanyahu and Defense Minister Shaul Mofaz are imposing conditions on the financial aid package designated for Israel Military Industries as part of a recovery program including a cutback in the number of workers and reducing wage costs to remaining employees.

Netanyahu and Mofaz did not specify what the plan would include. Treasury sources said, however, yesterday that it would include early retirement or layoffs numbering hundreds of workers. Details would be worked out with workers' representatives, the sources said.

Some 1,000 Israel Military Industries workers demonstrated yesterday across from the Finance Ministry in Jerusalem, demanding the government inject the company with capital to prevent a repeat of May's fiasco, when base salaries were paid late.

Workers committee chairman Yitzhak Yehuda asserted that the government should transfer NIS 350 million to the company to allow it to meet its salary and pension obligations as well as its debts to suppliers. Otherwise, IMI would progressively cease to function and its survival would be in danger.

"IMI has an impressive $1.3 billion in orders, and it has contracts with many countries," said Yehuda.

"The company creates military solutions to security threats including Qassam missiles being fired from the Gaza Strip. Its unthinkable that a crisis in the company continues because the state failed to transfer funds to it," he said.

Histadrut labor federation chairman MK Amir Peretz told IMI demonstrators yesterday, "The half-price supermarket chain located in the Finance Ministry is liable to cause valuable assets to be privatized on the cheap in order to dump them off at any price."

In fact, the government has transferred $10 billion to IMI over the past decade to save it from dire straits. Despite its ongoing struggles, IMI workers enjoy relatively high salaries, averaging a reported NIS 17,200 gross per month.

The treasury announced after the two ministers met with IMI management that in light of the aid provided in the past, any new assistance would need to be based on workers pitching in as well. Wage costs are higher at IMI relative to companies facing serious financial crises, according to the treasury, while "Israeli citizens paid huge sums in attempts to revitalize the company."