IAI to Consolidate Three Business Groups into a Single Aviation Group

The new group will focus on four business lines: aircraft development and manufacturing; development and production of aviation assemblies; aircraft conversion and enhancement; and aircraft maintenance

Harel Locker, IAI's Chairman of the board (Photo Credit: Chaim Zach, GPO)

Israel Aerospace Industries' board of directors, chaired by Harel Locker, approved the proposal of CEO & President Joseph Weiss to implement a structural transformation. The main initiative implemented under the transformation is the establishment of a single aviation group for all of IAI's aviation businesses. Currently, IAI is structured in six independent groups, each with a turnover of several hundreds of millions of dollars. The new group will focus on four business lines: aircraft development and manufacturing; development and production of aviation assemblies; aircraft conversion and enhancement; and aircraft maintenance. Yossi Melamed, Executive Vice President & General Manager of Bedek Aviation Group was named General Manager of the new group.

IAI exports most of its produce, which is estimated at approx. $4 billion a year. The new structure will be organized according to business lines, as customary in similar leading corporations. Under the new structure, IAI will be better positioned to reinforce existing synergies between its various operations and will lead to significant operational streamlining, including coming out of existing unprofitable lines of business.

Harel Locker, IAI's chairman, said, "IAI is undertaking a structural change process into a business line-oriented structure that will strengthen our edge in the fiercely-competitive global markets in which it competes against giant multinationals. The transformation is implemented at a time in which many countries bring home their manufacturing operations and are fighting aggressively for market shares. IAI has some of the world's best human capital and technological capabilities and is well positioned to win more markets by focusing on our relative edge and clear business lines. The initiative approved today does exactly that."

The decision was taken following record-breaking contracts entered by IAI over the past year, including several huge deals, significantly increasing its order backlog.

Joseph Weiss, IAI's President and CEO said, "Recent years saw the global civilian aviation market growing consistently at 5%-7% a year. IAI needs to make the necessary adaptations of its operations to benefit from this growth. For some time we have been considering various alternative adjustments to ensure the conservation and profitability of our national civilian aviation infrastructures while focusing and leveraging the synergies between the various fields of operation to adjust our operations to the global markets. The decision taken today is expected to respond effectively to the challenges while placing IAI on par with the global leaders. We believe the initiative will yield efficiencies and reinforce existing synergies so as to significantly improve our competitiveness."

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