US-based Israeli firms adjusting

After years of subsidizing Israel’s defense industry, the U.S. is insisting Tel Aviv spend all of its American military aid with U.S. firms. The Israeli government and hundreds of companies are scrambling to adjust with at least one estimate predicting 20,000 jobs lost. In the past, the U.S. provided Israel with grants under the Foreign Military Sales (FMS) program. Israel could convert 25 percent of dollars to shekels to buy Israeli products and support local R&D. Under the new 10-year agreement, the percentage will drop to zero. The agreement was signed in September 2016. The US will pay Israel $34B from 2019 to 2028, but will have to be used for the purchase of American-made systems. The Israeli defense industry isn’t waiting on its government to take action. At Israeli Aerosapce Industries (IAI): “(W)e are reorganizing our activities in the U.S to be ready for the changes in the market,” said Joseph Weiss, president/CEO. The Israeli company currently operates in the U.S. through local companies: IAI North America and its subsidiaries Stark Aerospace of Columbus, Miss. and ELTA US. “We are in the process of building a new strategy for our operations in the U.S.,” said Weiss.” It will be based on proxy companies that will have U.S boards and will act separately from its other activities. (Source: Breaking Defense 04/20/18) Gulf Coast Note: Stark Aerospace’s Unmanned Aerial Systems (UAS) division produces the ArrowLite sUAS and supports the U.S. Army Hunter MQ-5B UAS.