Israeli labor dispute could disrupt production of Arrow 3 weapon

JERUSALEM — The Israel Aerospace Industries workers’ union has announced a labor dispute and is threatening to disrupt the company’s supply to its customers.

The dispute, announced Monday, follows the Israeli Finance Ministry’s demand that it regulate so-called salary anomalies found within the state-owned defense company. The government is seeking the return of hundreds of millions of shekels that IAI employees received over multiple years without governmental approval, contrary to what is customary in state-owned firms.

But the union describes the anomalies as incentives, claiming they are primarily meant to help with employee retention. The union wants the salary deviations to be incorporated into the company’s budget.

The union added that if the Finance Ministry does not meet its demands, the supply of the Arrow 3 air defense system to Germany, which is the largest defense deal in the history of Israel and the company, will be among the disrupted programs.

“Our goal is not to harm the company or its customers,” Yair Katz, chairman of the union, told Defense News. “Rather, exactly the opposite: to preserve it by preserv[ing] our employees.”

“Since our demands were not met by the Ministry of Finance, we declared a labor dispute, and we now demand the intervention of the prime minister,” Katz added.

Katz said IAI workers will not carry out their threat of disruption until after they have exhausted discussion procedures with all the relevant parties, including Prime Minister Benjamin Netanyahu and the minister responsible for the authority of government companies, David Amsalem.

A meeting held with Amsalem on Tuesday — which also involved IAI management, the union committee and the salary commissioner with Israel’s treasury — ended without an agreement.

“The employees don’t want foreign customers to think twice about doing business with the IAI, but if our issue will not be addressed, it is possible that the prime minister will receive complaints from foreign leaders about delivery delays of systems, and then he will understand the magnitude of the crisis and intervene to solve it,” Katz said.

The treasury has said it is ready to meet with the company’s management and union representatives to discuss a new collective agreement that will respond to the changing labor market.

However, the union said the proposals from the latest meetings did not address the issue to their satisfaction.

Defense News has learned that during Tuesday’s meeting with Amsalem, the parties decided to try drawing up an interim agreement within a week that would last for three months, during which they would discuss a permanent agreement to resolve the issue. An interim agreement is yet to be signed.

On Thursday, the Israeli Defense Ministry announced that officials representing the government and the German Defence Ministry met to discuss the production of the Arrow 3. The contract was signed in November 2023 after approval from the U.S. government in August that year. Germany is set to receive its first Arrow 3 battery as early as the end of 2025. Germany has already transferred $600 million of the $3.5 billion deal, and IAI is supposed to complete the delivery of the remaining batteries up through the end of 2030.

An Israeli delegation meets with their German counterparts amid negotiations over selling the Arrow 3 air defense system. (Israeli Defense Ministry)

IAI has experienced so-called salary irregularities for several years, with the treasury bringing them up annually. Until the recent dispute, the Israeli government had conceded to one-off salary increases for IAI employees, while also agreeing to discuss with the union a way to settle so-called salary anomalies and set up a new employment agreement. But these discussions never ended in a resolution.

The workers’ union and the company itself are united in the union’s demand to incorporate the alleged salary anomalies into the company’s budget.

IAI is fully owned by the Israeli government and as such is subject to supervision by the Finance Ministry, which outlines the salary framework for the company’s managers and employees.

“IAI employees have been working 24/7 since Oct. 7, and the decision of the salary commissioner at the Ministry of Finance comes in the most wrong timing,” Boaz Levy , the chief executive of IAI, told Defense News, referring to the day Hamas attacked Israel, which led to the ongoing war in Gaza .

“Wage irregularities are nothing new, and the issue can wait until the war subsides,” Levy added. “The company’s management and its employees should not be distracted from their work due to this issue. And the company’s board of directors, its management and its workers’ union stand together in opposition to it. The company is ready for a new collective agreement, but this is not the time.”

The executive expressed confidence that the prime minister’s intervention would help, noting that any resolution would be ”a temporary solution until the end of the war,” after which there would need to be “a comprehensive solution.”

The Prime Minister’s Office did not respond to Defense News’ request for comment.

The Finance Ministry declined to discuss whether it will impose sanctions on the company, its management or its employees — or whether a solution has been found.

However, the ministry did tell Defense News that its commissioner in charge of payments “is not opposed to salary promotions for IAI employees, provided that these promotions do not lead to a deepening of the existing salary anomalies.”

Amid the dispute, Levy said, the company will “continue to work fully, both with our clients abroad and in Israel.”

“But I cannot declare that there will be no disruption, since I do not know what the day will bring,” he added.

Tzally Greenberg is the Israel correspondent for Defense News. He has experience reporting on economic affairs as well as defense and cyber companies.

耶路撒冷——以色列航空航天工业公司工会宣布发生劳资纠纷，并威胁要扰乱公司向客户的供货。

这场纠纷于周一宣布，起因是以色列财政部要求以色列航空航天工业公司（IAI）规范这家国有国防企业内部所谓的薪酬异常情况。政府正在寻求追回IAI员工多年来未经政府批准而领取的数亿谢克尔，这违反了国有企业的惯例。

但工会称这些异常情况是激励措施，并声称其主要目的是为了留住员工。工会希望将这些薪资差异纳入公司预算。

工会补充说，如果财政部不满足其要求，向德国供应“箭3”防空系统（这是以色列和该公司历史上最大的国防交易）的项目也将受到干扰。

工会主席亚伊尔·卡茨告诉《防务新闻》：“我们的目标不是损害公司或其客户，而是恰恰相反：通过保护我们的员工来保护公司。”

卡茨补充说：“由于财政部没有满足我们的要求，我们宣布发起劳资纠纷，现在我们要求总理介入。”

卡茨表示，以色列航空工业公司 (IAI) 的员工在与包括总理本杰明·内塔尼亚胡和负责国有企业管理的部长戴维·阿姆萨勒姆在内的所有相关方完成讨论程序之前，不会实施他们的扰乱威胁。

周二与阿姆萨勒姆举行的会议——以色列航空工业公司管理层、工会委员会和以色列财政部薪酬专员也参加了会议——最终没有达成协议。

“员工们不希望外国客户在与以色列航空工业公司（IAI）做生意时犹豫不决，但如果我们的问题得不到解决，总理可能会收到外国领导人关于系统交付延误的投诉，然后他就会意识到危机的严重性并介入解决，”卡茨说。

财政部表示，已准备好与该公司管理层和工会代表会面，讨论一项能够应对不断变化的劳动力市场的新集体协议。

然而，工会表示，最近几次会议提出的方案并没有令他们满意地解决这个问题。

据《防务新闻》报道，在周二与Amsalem公司的会晤中，双方决定尝试在一周内起草一份为期三个月的临时协议，在此期间，他们将讨论达成一项永久性协议以解决该问题。目前，该临时协议尚未签署。

周四，以色列国防部宣布，以色列政府官员与德国国防部官员举行会晤，讨论“箭3”导弹系统的生产事宜。该合同于2023年11月签署，此前已于同年8月获得美国政府批准。德国最早将于2025年底接收首批“箭3”导弹系统电池。德国已支付了35亿美元合同中的6亿美元，以色列航空工业公司（IAI）应在2030年底前完成剩余电池的交付。

以色列代表团与德国同行就出售“箭-3”防空系统进行谈判。（以色列国防部）

以色列航空工业公司（IAI）多年来一直存在所谓的薪资不规范问题，财政部每年都会提出调整。在最近的争议之前，以色列政府曾同意为IAI员工一次性加薪，同时也同意与工会协商解决所谓的薪资异常问题并制定新的雇佣协议。但这些讨论始终未能达成一致。

工会和公司本身在工会的要求上达成一致，即要求将所谓的薪资异常情况纳入公司预算。

IAI 由以色列政府全资拥有，因此受财政部监管，财政部制定了公司管理人员和员工的薪酬框架。

“自 10 月 7 日以来，IAI 的员工一直在 24 小时不停歇地工作，而财政部薪酬专员的决定是在最不恰当的时机做出的，”IAI 首席执行官博阿兹·莱维 (Boaz Levy) 告诉《防务新闻》，他指的是哈马斯袭击以色列的那一天，这导致了加沙地带持续不断的战争。

“工资违规并非新鲜事，这个问题可以等到战争平息后再处理，”莱维补充道。“公司管理层和员工不应因这个问题而分心。公司董事会、管理层和工会一致反对这种做法。公司愿意签订新的集体协议，但现在时机不成熟。”

行政部门表示相信首相的干预会有所帮助，并指出任何解决方案都将是“战争结束前的临时解决方案”，之后需要“一个全面的解决方案”。

总理办公室没有回应《防务新闻》的置评请求。

财政部拒绝讨论是否会对该公司、其管理层或员工实施制裁，也拒绝透露是否已找到解决方案。

然而，国防部确实告诉《防务新闻》，其负责薪酬的专员“并不反对以色列航空工业公司员工的薪资晋升，前提是这些晋升不会导致现有薪资异常情况的加深。”

莱维表示，尽管存在争议，但公司将“继续全力以赴地与国内外的客户开展合作”。

“但我不能断言不会出现任何混乱，因为我不知道明天会发生什么，”他补充道。

扎利·格林伯格是《防务新闻》的以色列记者。他拥有丰富的经济事务以及国防和网络安全公司报道经验。