'Stealth' Bonanza May Be Smaller Than Thought

Instead of about $4 billion in work, Israeli companies will be getting between $1 billion and $1.3 billion.

In mid-August, Defense Minister Ehud Barak confirmed the purchase of 20 futuristic F-35 stealth fighter jets for the Israel Air Force, at a total cost of $2.75 billion. The Defense Ministry also said at the time that Israeli companies would get about $4 billion in work from Lockheed Martin, the jets' maker, as part of the deal. But now it turns out that the accord had been contingent on Israel buying 75 of the jets, and the lesser figure will win Israeli companies a proportionally smaller amount of work.

In other words, instead of about $4 billion in work, Israeli companies will be getting between $1 billion and $1.3 billion.

The Israeli defense companies are pleased even over the smaller figure, and consider this an opening that could be expanded in the future.

The discussion about the F-35 procurement is still taking place, in a ministerial committee headed by Prime Minister Benjamin Netanyahu himself. The jets would be paid for with U.S. military aid money, not the Israeli budget. But Finance Minister Yuval Steinitz has objected to any such deal, on the grounds that this is a huge cost at a time when the world is moving on to aerial warfare using unmanned planes.

Defense circles are confident Israel will purchase the jets nonetheless, and feel the question is only over how many planes the government will approve: 75 or 20.

Among the companies expected to get work are Elbit Systems, which among other things makes smart helmets for pilots; Israel Aerospace Industries, which would make the jets' wings; and Blades Technology, which would be involved in making the engines. Blades is owned by the Wertheimer family and Pratt & Whitney. The Israeli companies involved would need to invest millions of dollars in equipment, and thus expect the alliance would continue beyond the stealth jet project.