Is PM serious about expanding local arms production, reducing dependence on imports?

Prime Minister Benjamin Netanyahu has said twice this week that Israel needs to reduce its dependency on imported military equipment.

He said this in a press conference he held on Saturday night, but after almost no media attention was given to the statement, he repeated it at the beginning of a cabinet meeting on Sunday.

“Israel is preparing the defense industries to disconnect from dependency on the rest of the world,” the prime minister said, adding that the war with Hamas has forced Israel into more defense spending than anticipated. The government will have to invest in a “multi-year plan to free Israel from dependence on external purchases,” he said. “We’ll need to equip locally, with a local manufacturing capability.”

Since the start of the war with its various fronts — against Hamas, Hezbollah, the Houthis — Israel has received weapons and ammunition, by air and by sea, almost entirely from the US. Much of the data on this is published on the Defense Ministry’s Telegram channel, which announces a major delivery every few days.

A review of the planes and ships that have reached Israel testifies to the massive commitment the US maintains to the security of Israel. American leaders always repeat this in their speeches, but since October 7 it has become a demonstrable fact.

The first plane with American arms landed in Israel on October 11, according to the Defense Ministry. Since then, the supply has been constant. By October 20, less than two weeks into the war, the Defense Ministry reported that the 45th American plane, carrying arms, jeeps, and military ambulances, had landed.

The arrival of 100 planes and five cargo ships was reported at the beginning of November (as well as a NIS 10 billion — $2.6 billion — purchase from Israel’s own military industry companies). By November 2, Israel had received 3,000 tons of US weapons, armored vehicles, protective equipment, ceramic helmets and more.

A month after the war began, the Defense Ministry announced that a ship had arrived in Ashdod port carrying 2,500 tons of military equipment in 170 shipping containers. The ship, which apparently began its journey in the US, was escorted by an Israel Navy warship.

In total, during the first month of the war, Israel received 123 planes and seven ships bearing 7,000 tons of weapons and military equipment.

A month later, on December 6, the Defense Ministry announced the arrival of the 200th plane, raising the total to 10,000 tons of military equipment. And the supplies are ongoing.

Decision in principle

A decision in principle to change policy, and strengthen local military industries instead of maintaining an overwhelming reliance on importing weaponry, was made by the Defense Ministry in mid-December.

“One of the lessons we’ve learned during the war is our need to boost our independence and industry,” wrote Defense Ministry Director-General Eyal Zamir at the time. “This is Defense Minister Yoav Gallant’s policy and we are working on it.”

Zamir added that investing in expanding local production lines was critical for supplying the needs of the IDF, would have long-term benefits, and would generate a massive cash flow into the economy while bolstering future defense exports.

Manufacturers Association of Israel president Ron Tomer recently told The Times of Israel that four months ago, some Israeli military industry production lines, including those making parts for armored vehicles, were underutilized and there was a concern that budget limitations were leading to reduced orders and an underequipped IDF.

“We were worried that a lack of IDF budget would reduce the overall equipment,” said Tomer. “In Israel, there are about 200 companies involved in various stages of building armored vehicles. If the IDF reduces the number of armored vehicles it needs, the firms that operate the production lines that make the parts become economically unfeasible; parts don’t get exported separately.”

The war has underlined the imperative to maintain these companies, he said. Damaged armored vehicles have been pulled out of Gaza and 95% were repaired and put back into action. “Just think what would happen if this [local parts and maintenance] industry didn’t exist, and we had to send armored vehicles overseas for repairs,” Tomer said.

What will Israel still need to import?

Even with the planned increased local military production, Israel would not manufacture warplanes, helicopters, warships, or submarines. Internal systems installed in the planes, helicopters, submarines, and ships would also still have to be imported, since foreign manufacturers don’t allow for separation between the core product and its installed systems, except for local adjustments for navigation and matching software.

Sources in the defense industries have understood from Netanyahu that his goals for boosted local production are focused mainly on manufacturing shells, precision weaponry, drones, tanks, jeeps, and various radar systems.

Most of these products are already manufactured in Israel, with the most significant industry being armaments of all kinds. There is also a desire to establish a capability for converting simple missiles into precision weaponry, via systems like the Joint Direct Attack Munition (JDAM) kit made by American companies, most notably Boeing.

Another product Israel wants to manufacture is the Hellfire missile, used by the IDF for decades. These rockets are launched from helicopters or ships and are meant for smaller targets such as vehicles. The missile is usually used for targeted hits of terrorists and has a smaller version armed with small blades instead of explosive materials to minimize damage.

During 2014’s Operation Protective Edge, the Obama administration halted the delivery of Hellfire missiles for the Israeli Air Force’s Apache helicopters in order to pressure Netanyahu to end that conflict. The Air Force decided to adjust its Spike missiles to enable launching them from the Apache, in order to prevent dependency on future deliveries of the Hellfire missiles.

Netanyahu’s announcements of the past few days came not only after the Defense Ministry’s declared plans for a boosted local production policy but also after former defense minister Avigdor Liberman published a defense agenda that underlined, among other things, that “arms storage and arms productions in Israel” had to be expanded.

Sources in the defense industry told The Times of Israel, however, that no preparation has been made to date for new production lines, nor have instructions been issued for factories to expand their local production capabilities instead of relying on imports.

Is Netanyahu merely trying to hint to the US that Israel will not want to keep being dependent on the current or next president’s kindness?

Perhaps, but there are plainly plenty of local benefits for the move, with one being the expansion of the circle of employers in the defense manufacturing industry, supplying local work in a difficult economic time.

Another is rapid supply during a war — even though the US maintains massive arms warehouses in Israel as part of its “War Reserve Stocks for Allies – Israel” policy. Israel is not allowed to use the weapons located in the warehouses without explicit permission from the US. The huge scale of arms deliveries since the war began would suggest that the US warehouses in Israel are not remotely adequate to meet wartime needs.

A third benefit is that expanding production in Israel releases defense funds. The less that Israel spends abroad on buying weapons, the more that will be made available for buying major products like planes and helicopters.

How feasible a switch?

According to sources in the industry, the three big aerial industry companies, Israel Aerospace Industries (IAI), Rafael, and Elbit, can set up new production lines relatively fast; as soon as the order is given, and resources are supplied, they’ll begin. For this to happen, Defense Minister Gallant and his ministry’s director-general will have to take the lead, since this kind of move is not generally advanced by the Prime Minister’s Office.

Regarding IAI, the question of privatization has been on the agenda for the last few years, and while interim governments in five different elections struggled to advance it, interim Government Companies Authority manager Yaakov Quint reportedly now intends to do so.

Tomer told The Times of Israel that he supports the move and that he would push for greater competition in the market. The expansion of existing production lines, and the introduction of new ones, he stressed, is meant to extend beyond IAI, among both larger and smaller local companies.

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This article was translated and edited from the original Hebrew article, published on The Times of Israel’s sister site Zman Yisrael.