Israeli Defense Firms in Shadow of Coronavirus

Israel's defense companies are preparing to prevent damage to production of weaponry, which is mostly for the IDF. From protective measures to emergency plans: This is how the companies are dealing with the Coronavirus crisis.

Israeli Defense Firms in Shadow of Coronavirus

Photo: MOD

How is the defense sector dealing with the Coronavirus crisis? Israel Defense sources told us what the large companies are doing. First, they are following the Ministry of Health’s instructions that employees avoid all flights abroad, and those who return are required to be quarantined at home. One exception was after the defense exhibition in Singapore in February, when one hundred Israeli participants were not quarantined due to a problematic management decision by the Ministry of Defense, which blamed the Ministry of Health. Luckily, there were no reports of infection among the participants.

One example of how important it is to address possible infection was the action taken by Facebook, which closed a factory during the last few days because an employee tested positive for the virus after visiting Singapore in late February. 

Additionally, employees of defense firms were instructed to avoid crowded places such as restaurants, pubs, Purim parties and so on, out of an understanding that a critical facility could be shut down if even one employee is infected. Ministry of Health directives stipulate limiting large conferences of 5,000 people or more, and companies are understandably not taking risks.

Under a Defense Ministry directive, every defense company must have a wartime emergency plan. This plan defines procedures for operational continuity but it is not suitable for pandemics, and as a result it is being expanded to address the Coronavirus outbreak. Every major company has overlapping production lines in Israel and abroad for some of its products. In this manner, it is possible to transfer mass production if a few locations cease to function. However, there is no such solution for the extreme case of a national pandemic. If the government does not perform geographical segmentation in time and does not inspect the areas where the factories are located, it is possible that the Israeli defense sector will be on the verge of shutdown.

During the last month and a half, alongside efforts to stabilize mass production, most companies are mapping out the global supply chain for each of their production facilities in order to identify the risks they face. This allows assessment of risks from subcontractors in other countries. Unlike war in Israel, the Coronavirus is a global threat. If a country where a certain supplier’s factories is located shuts down its economy, the Israeli factory will suffer damages. This is the price of globalization.

Despite this, some suppliers have production lines around the country or abroad, and in emergency situations they optimize their mass production. The main question is to what extent production will be damaged if the same vendor supplies several major customers around the world.

Means of Protection and Disinfection

Kobi Freedman, founder and CEO of cyber security company Findings (formerly IDRRA), said “The Coronavirus threat damages local and global supply chains. For that reason, Israeli customers are looking for a way to quickly, automatically and effectively map out risks created by disruptions of vendor operations abroad. We have added a new functional continuity risk-mapping module focusing on scenarios arising from the spread of the virus in various parts of the world, based on our existing third-party cyber risk mapping system."

Yet another aspect is factories equipping themselves with protective clothing and masks. Some defense companies regularly operate clean rooms, and thus possess a stock of protective products. The factories are also required to hold such stock to be used in case of chemical warfare, and the stock is also suitable for pandemics. Since the outbreak in China, most defense companies began distributing hand sanitizers to every facility and at the entrance to every room.

Other actions include operating the lunchroom for more hours a day to make it less crowded during mealtimes, avoiding unnecessary meetings, and increasing the option to work from home when possible. Some roles require physical presence in the factory or use of a classified network that cannot be accessed remotely.

Another aspect is the media dimension. Not only reporters, but also foreign governments (as customers) and OEM clients (to whom the company sells parts for integration into the final product) may ask questions if and when Israel faces the situation of a pandemic. Commercial defense companies are expected to receive inquiries from investors and the Capital Market Authority about the expected damage to business operations.

What About the Defense Ministry?

The Defense Ministry has an emergency body responsible for the continued functioning of companies. Unlike the ministry's defense security authority, the DSDE, which specializes in information security, it is a body within the operations department that is responsible for continued production of weapons needed for the IDF. As previously mentioned, this body prepares the companies for the scenario of war, not the scenario of a pandemic. This is a major oversight on the part of the ministry, which as stated, also failed to deal properly with those who returned from Singapore. In the post-Coronavirus era, the ministry may draw up new procedures for addressing a similar situation in the future.

In conclusion, with or without the ministry, every CEO is responsible for preparing his/her company for the scenario of a pandemic in Israel. IDF inventory planning officers must prepare for this situation as well, and it seems likely that such actions are being taken vis-a-vis the companies. However, it seems that the Israeli defense sector, like the defense sectors of other countries, is unprepared for the scenario of a global pandemic. Is this information comforting? Apparently not. In the meantime, it seems like CEOs of the companies have taken the reins and are monitoring the preparations of the factories for a situation if and when a pandemic is declared in Israel.





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