U.S. Engine Maker to Close Israeli Factory, Lay Off 900 Workers

Asher Shmueli, the head of the Histadrut's western Galilee chapter, said that he told the management and the union that 'the Histadrut will not hold negotiations on closing the factory, but will act to keep the plant's important activities going'

נתנאל גאמס
Netanel Gamss
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נתנאל גאמס
Netanel Gamss

The U.S.-owned Pratt & Whitney aerospace manufacturing company, one of the world's largest jet engine companies, announced on Sunday that it will be shutting down its compressor blades manufacturing plant in 2025 and laying off over half of its employees in Israel.

The Blades Technology Ltd. (BTL) plant employs about 1,300 people and will be dismissing 900 of its employees beginning in 2024. The blades are produced in Nahariya and Tefen in northern Israel.

The company's announcement stated that it is making the layoffs due to the factory's growing losses, because of the ongoing and intensifying decline in demand for compressor blades – a component in jet engines.

The BTL company's announcement said it had alerted the Histadrut labor federation and the workers' union, and will hold negotiations with them regarding the workers' conditions.

The company has stressed that as it halts its production of compressor blades, it will continue and expand the manufacture of integrally bladed rotors. Turbine Jet Ltd., another Pratt & Whitney subsidiary based in Tefen, will continue manufacturing the turbine blades needed for the corporation's core activities.

Asher Shmueli, the head of the Histadrut's western Galilee chapter, said that he told the management and the union that "the Histadrut will not hold negotiations on closing the factory, but will act to keep the plant's important activities going. [The factory] supplies a living to workers in the north. Our goal is that the company will find another buyer who will run the plant as a living business. At the same time, we will declare a labor dispute at the company as early as today. The Histadrut will bring this issue to government ministries as well."

Shmueli noted on Monday that "even if the demand declined, how can you close a place like this at once?" He noted that BTL could have requested aid from the state. "The company puts out a message to all of its workers that most of them are expected to lose their jobs via email – while we were in a meeting with them. They didn't bother to get the workers together, to sit them down and to explain this to them clearly."

Histadrut chairman Arnon Bar-David added that the organization, "Will not allow such critical harm to come to hundreds of workers in Israel's periphery. We will use every means available to us in order to protect the future of employment of these workers. We will not allow mass layoffs in one fell swoop, and via a letter sent in the middle of the workday to workers."

A source in northern Israel's metal industry said on the matter that "An American company isn't sensitive to worker's issues or the Histadrut. Zero. To them, this is a tiny, marginal factory. They'll close it, and if the workers make trouble – they'll close more centers."

The source added that "If Israel had the benefit of having low wages years ago, that's over. Maybe they'll bring production to India or a cheaper country. The only possibility for preventing closure is if the government gives the company some sort of subsidy, but it's doubtful that something like that could happen."

Blades Technology was founded in 1968 by industrialist Stef Wertheimer. In 2014, Wertheimer sold the company to Pratt & Whitney, which had been a partner of BTL, which had bought the Wertheimer family's shares of the company for several hundred million shekels.

After selling the company, Wertheimer said, "We're selling, because we have done our part. I founded this company at the behest of Moshe Dayan, following the French embargo on supplying spare parts for Mirage jets. I carried it for 20 years, and Eitan [Wertheimer] carried it for 20 more years. We founded a good company in Israel that employs 2,000 employees. Selling it is a natural process, like [Warren] Buffett buying Iscar. This is a global business, and we must be sure that it can continue."

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