General Dynamics signs $150m. reciprocal procurements deal

Defense establishment sources say the deal will enable Israel to boost production of the Merkava 4 tank by freeing up the shekel budget.

By YUVAL AZULAI/GLOBES
May 10, 2011 22:47
1 minute read.
An IDF Merkava tank being transported near Gaza.

IDF tank 311. (photo credit: REUTERS)

 
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General Dynamics Corporation unit General Dynamics Land Systems will buy components from Israeli companies for M1A2 Abrams tanks and Stryker armored personnel carriers (APCs) for the US Army, as well as other products, as part of reciprocal procurements agreements with Israel.

General Dynamics recently signed an agreement with the Industry, Trade and Labor Ministry’s Industrial Cooperation Authority to make $150 million of reciprocal procurements in Israel in exchange for manufacturing the Israelidesigned Leopard APC, considered one of the most advanced APCs in the world, for the IDF. General Dynamics will begin production of the Leopard in 2013.

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Defense establishment sources say the deal will enable Israel to boost production of the Merkava 4 tank by freeing up the shekel budget, because the Leopards will be bought with money from US military aid. Final assembly of the Leopards will be carried out at the Tank Development Administration in Israel.

Scores of mostly small Israeli companies that manufacture Merkava and Leopard components have been increasing worried in recent months about the transfer of Leopard production to General Dynamics, saying it was jeopardizing their business.

In response to these concerns, General Dynamics’s Israeli representative, Elul Tamarynd Ltd., convened representatives of defense contractors several weeks ago to update them on ways to participate in General Dynamics’s planned reciprocal procurements.

Participating Israeli companies included Israel Military Industries Ltd., Tefen Metal Castings Ltd., Simat Industries Ltd., Imco Industries Ltd., Agam Metals Ltd. and Yail Noa Ltd.

Elul Tamarynd CEO Avner Raz said General Dynamics has appointed a special team to handle relations with Israeli companies.

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