STRICTLY SECURITY | Israel’s defense industry was born out of the need to be as self-sufficient as possible during times of war. In order to be self-sufficient, Israeli firms have to be competitive on the global market, where export sales sustain the capabilities that provide for Israel’s defense. In this evolving industry, one firm in particular is leading the way. Our Barbara Opall-Rome has the story.

Story:

It’s an industry built to sustain embargos, boycotts and wartime disruptions.

It’s an industry that launches satellites to space, detects tunnels underground
and defends citizens and soldiers against a full spectrum of threats.

It’s an industry that assures intelligence superiority and fortifies Israel’s long arm.

It’s also an industry that survives through export sales. For every 20 dollars of high-tech innovation aimed at Israel’s defense, it must sell 80 dollars abroad.

‘We have been compelled to create a permanent armaments industry of vast proportions…In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought by the military industrial complex,’ former U.S. President Eisenhower once said.

Relative to Israel’s size, the industry here is vast. It consistently ranks among the world’s top-tier arms suppliers and provides employment for tens of thousands here and around the world.

Yet aside from fringe opposition, Israel’s military-industrial complex is not cause for the kind of concern voiced by Eisenhower nearly 60 years ago. Here, it’s a badge of honor.

But unlike the many dozens of firms that support other world-leading industries, in Israel, this vast complex is controlled by just three companies.

And then there’s Elbit

Privately-owned and publicly traded, Elbit leverages innovation borne of borne of necessity to the mutual benefit of Israel’s security establishment and its corporate shareholders.

State-owned IAI and Rafael, like Elbit, have leading-edge technology, respectable backlogs, and portfolios that span air, sea, land and space domains. But they’re not nearly as resilient or profitable as Elbit, which netted more than a billion shekels last year.

‘Elbit is a private company, and when the chairman of Elbit decides something at night, in the morning it’s done, while state-owned defense companies, there’s such a process. They have to go to Knesset committees and get approvals for every small thing. That’s why Elbit is years ahead,’ vetaren Israeli defense industry analyst Arie Egozi explained.

Through a series of strategic acquisitions, including its most recent purchase of state-owned IMI, Elbit now controls 95 percent of Israel’s non-government-owned market.

Elbit is Israel’s largest provider of unmanned aircraft; a field pioneered and long-dominated by IAI.

With all but five percent of the non state-owned market now firmly under the Elbit umbrella, what’s next? Is there anything left to satisfy Elbit’s appetite for growth?

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