Israeli Manufacturers Push to Be Exempt From Country’s Lockdown

Exporters fear they will be replaced by companies in countries with less draconian policies against coronavirus

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A worker at the Phoenicia factory, 2019.
A worker at the Phoenicia factory, 2019.Credit: Ofer Vaknin

Before the government announced Tuesday that it was tightening the country’s lockdown against the coronavirus pandemic, the Manufacturers Association of Israel worked frenetically to exempt industries.

“A day that I don’t manufacture as usual is another day that my customers don’t receive goods,” an executive in the plastics industry said. “They won’t wait for me. They’ll switch over to working with Turkish suppliers or find another way to get their goods.”

Exempting only industries deemed crucial would cost an estimated 1.4 billion shekels ($366 million) in industrial exports, according to the Manufacturers Association’s chief economist.

Industries not deemed crucial account for 49% of Israel’s jobs.

The Hadera paper factory, in Hadera.Credit: No credit

The government has been hard at work drawing up a list of industries considered crucial, thus permitting them to work at full capacity and not shrink to 30% of their workforce.

A significant number of exporters are not on the list.

The National Security Council, which answers directly to Prime Minister Benjamin Netanyahu, decides which businesses and industries are crucial. Critics say its decisions are based on ensuring Israel’s domestic supplies, not on ensuring that Israeli exports continue.

If this scenario plays out, some companies will have a hard time recovering, they say.

To ensure that as many plants as possible can continue working, the Manufacturers Association sent out instructions for maintaining workers’ health. One directive is to keep factories from having to shut down due to contact with a coronavirus patient.

Regardless of whether the factories are shuttered, there has been a sharp drop in demand. An owner of a candy factory said he has seen no demand for Passover week, which starts on April 8. The plant has significant loans, and the sharp drop in orders could send it into collapse, he said.

“Around the world, industry continues producing for the simple reason that if it stops, a large portion will be stopped forever,” said Ron Tomer, president of the Manufacturers Association.

Israel’s manufacturers say countries around the world are maintaining their industries and not closing factories, but this is not entirely true. In many places, companies have decided on their own to close plants for the time being.

Many companies including major car and airplane makers Fiat, Peugeot, Renault, Ford and Airbus have chosen to suspend operations on their own.

But the United States, for example, has not taken wide-scale shutdown measures, while Europe’s restrictions do not extend to work or manufacturing.

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