IMA to Cut Spending as Sale Stalls

The Government Companies Authority demanded this week that Israel Military Industries draw up a recovery program, after efforts to privatize the company stalled.

The Government Companies Authority expects the board to undertake dramatic cost-saving steps such as forced vacations, shutting production lines that are not expected to be profitable soon, and cancelling raises that were not mandated by a collective wage agreement or seniority.

In a letter to the IMI, the GCA demanded that the company ensure that its expenses are covered by available cash.

IMI's management expects a cash flow deficit of NIS 360 million in 2010, with revenues of NIS 2 billion. The firm ended 2009 with a deficit of NIS 200 million.