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IAI is Getting Leaner and Younger

Rejuvenating IAI’s portfolio and workforce was not a trivial act for Nissan. Governed by cumbersome, bureaucratic regulations and political interests as a government controlled company, IAI has remained on the government ‘privatization list’ for years, lacking agreement among politicians, employees, unions and management.

“We are moving forward toward privatization but the actual negotiations haven’t started yet.” said Nissan, “Management, the unions, the national corporate authorities and the ministry of finance will have yet to come to an agreement before this process begins.” Different from the past, all parties now agree that it is time to move forward with privatization. “Everyone understands that what applies to Israel’s national airline, refineries, port authorities and Railway Company should also apply to IAI” Nissan confirms.

Ytzhak Nissan, IAI President and Chief Executive Officer. Photo: IAI

As IAI moves forward, improving performance, increasing sales and profitability it also has to reduce and rejuvenate its work force. “In recent years we reduced our workforce by about 1,600 personnel, at an investment of $300 million. Some were leaving on early retirement, other positions were eliminated by employee reassignments between divisions and groups, enabling IAI to become leaner, more efficient organization. This process was part of our recovery plan we initiated in 2006. These moves, tough as they are, were mandatory for the company and were agreed upon by the management, employees and their representatives” Nissan said. Other aspects of the recovery plan include extensive cost reduction measures, implemented by each of the operating divisions. Under these measures IAI now subcontracts significant activities to domestic and foreign suppliers, the later are also important to fulfilling our offset obligations, which already amount to hundreds of millions of dollars.

While reduction of workforce in some areas was necessary, IAI employees remain the most important asset of IAI, offering unique pool of talents, experience and expertise essential to the areas of activities pursued by the company. Highly skilled scientists and engineers, experienced military pilots and combat veterans, contributing hands on experience with the latest military domains, IAI counts on these experts, associates and consultants participating in think tanks to develop tomorrow’s military capabilities.

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