JERUSALEM – The Israeli Aerospace Industries workers’ union has reached an agreement with the government’s Ministry of Finance where so-called salary anomalies previously provided to the company’s employees will be recognized as retroactive special allowances, according to the union.
The IAI labor dispute came to a head in early May after the ministry demanded the return of funds received by the company’s employees over several years without government approval, contrary to what is customary in state-owned companies. The divergence placed the supply of Arrow 3 air defense system to Germany under threat.
IAI is expected to distribute about a third of its $320 million in profits from 2023 as bonuses to its approximately 15,000 employees. Half of IAI’s profits will go to the State as dividends.
“The apparent outline outlined will allow time to try to regulate the alleged salary anomalies, while also allowing salary promotions for employees,” Yair Katz, president of the workers’ union, told Defense News. “The new agreement is expected to be signed within about three weeks. And with its signature it will be possible to definitively state that the threat of labor conflict has been taken off the table.”
Despite the previous threat of business interruption, IAI management supported its employees and formed a united front with the union in its discussions with the ministry, claiming that the funds were intended to retain its workers.
Defense News has contacted IAI and the ministry for comment.
