Israel Kills Costly Jet Fighter Project : 12-11 Cabinet Vote Ends Bitter Dispute Over Building Plane Opposed by U.S.

JERUSALEM —  Swallowing its national pride, the Israeli government voted narrowly Sunday after a long and dramatic debate to cancel the multibillion-dollar Lavi jet fighter project.

The decision was immediately welcomed in Washington, which took the extraordinary step two weeks ago of publicly urging Israel to drop the aircraft “in the best interests of both our countries.” The United States has funded virtually the entire $1.5-billion cost of the project to date.

But workers and management at Israel Aircraft Industries, which developed the Lavi (Hebrew for “lion”) and where thousands of jobs are at stake, branded it a “catastrophe” and threatened drastic protest measures.

Moshe Arens, a former ambassador to Washington and considered the spiritual father of the Lavi, said he will resign his Cabinet post rather than share collective responsibility for the decision. And Industry Minister Ariel Sharon, a rightist in the Cabinet, called it a “surrender to foreigners” in what some saw as a harbinger of bitter political infighting ahead.

Pivotal Abstention

The final vote was 12 to 11 against continuing the seven-year-old project with one pivotal abstention by Health Minister Shoshana Arbeli-Almozlino, a member of Foreign Minister Shimon Peres’ Labor Alignment who had previously supported the Lavi.

In Washington, State Department spokesman Rudi Boone declared: “We welcome the Israeli Cabinet’s decision to terminate the Lavi project. We recognize that this was a difficult decision for Israel, but it is one we believe will best serve Israel’s interest.”

Billed as one of the most crucial economic and strategic decisions in the country’s history, action on the Lavi was finally taken along partisan political lines. The only Cabinet officer to cross party lines was Finance Minister Moshe Nissim, a consistent opponent of the project even though he belongs to Prime Minister Yitzhak Shamir’s Likud Bloc, which has been considered the driving force behind the Lavi. Nissim said there was no economic alternative to killing it.

But it was Arbeli-Almozlino’s surprise abstention that turned the tide. “I am very sorry, but this is the decision of the party, and I am a member in the party,” she told reporters after the meeting. Israel army radio reported that she wept as the vote was taken.

Shamir Accused by Peres

Peres accused Shamir of being the first to “politicize” the vote this weekend, when he allegedly pressured Tourism Minister Avraham Sharir, a Likud member and formerly a Lavi opponent, to switch sides.

“Until Friday, it was a personal matter of each member of the Cabinet,” Peres said. “But when the Likud started to press Minister Sharir, it became a political matter. And that is why we had to ask Shoshana to vote with us. I sympathize with her. I know how she feels. But we had to do it.”

Peres himself had favored continuation of the Lavi as recently as two weeks ago, when he joined Shamir in blocking a Cabinet vote that looked as if it would go against the project. But he switched sides in recent days, apparently influenced by strong U.S. government opposition to the program and concern that his stand had put him in conflict with almost every other top leader of his centrist political party.

Two Lavi prototypes have already been built and flight-tested, and production of up to 300 Lavis was originally to have begun in the early 1990s. However, Washington turned against the Lavi as it became clear that it would wind up costing much more than originally forecast and that it would be far cheaper for Israel to buy American-made F-16 fighters.

Other Programs Threatened

The Israeli military also argued against the project, saying that it would starve other essential weapons development programs of vital funds.

Sunday’s Cabinet resolution that scrapped the Lavi project simultaneously adopted a Peres plan to divert new defense business to Israel Aircraft and to seek greater Israeli participation in advanced U.S. fighter projects as a substitute.

Washington has promised special aid concessions to help Israel cover extraordinary costs of canceling the program. According to the Cabinet decision, Israel is also to examine with Washington “Israel’s participation in the development of the next model of the F-16, and the possibility of participation in the production stage.”

The resolution adds that “an immediate effort will be made to increase the part of (Israel Aircraft) in the production of the F-16. . . .” And Israel Aircraft is to get an extra $100 million annually to develop new aviation systems and other weapons systems.

Still, there was no celebrating Sunday’s decision, even among those who had opposed the project. “Anyone who is happy today doesn’t understand the situation,” commented Ezer Weizman, minister without portfolio, who had approved the original plan for a cheaper Lavi when he was defense minister in 1980 but who voted against the increasingly expensive program Sunday. Weizman, who was with Likud at the time, later quit and formed his own party, which is now aligned with Peres.

In an impassioned defense of the Lavi two weeks ago, Prime Minister Shamir reportedly called the project important to national morale.

“If we halt the project, the public will regard it as a tragedy, a failure, a surrender,” he warned then. “It is too early to put the pride of this country’s industry into receivership.”

Shamir decided only at the last minute to put the issue to a final vote at Sunday’s Cabinet meeting. “He thought there was a good possibility of a draw,” said his spokesman, Avi Pazner.

A tie vote would have left in force a previous Cabinet decision, from 1985, reaffirming the Lavi project.

Political Ploy?

Another theory is that Shamir welcomed the outcome as one that would find favor in Washington while enabling the Likud to paint the rival Labor Alignment as a villain in the eyes of Israeli voters. According to recent polls, as much as 60% of the Israeli public favored continuing the Lavi.

Shamir refused to comment on the decision Sunday night.

Arens, minister without portfolio who is considered Shamir’s closest ally in Likud, said he had no choice but to announce his intention to resign. “If I were to remain in the government it would mean that I would continue to carry responsibility for this decision,” he explained. He said he considers the decision “a major mistake that will hurt not only our entire (Israel Aircraft) industry, (but) our defense effort, the economy, and Israeli society as well.”

Arens’ resignation cannot take effect for at least 48 hours, however, and many political analysts here were skeptical Sunday that he would go through with his threat. “As nice as such gestures are, they are very costly in terms of politics,” commented one, who requested anonymity. In the meantime, Arens has bolstered his reputation as the champion of the Lavi before the 20,000 employees of Israel Aircraft and their families--a potential voting bloc that could account for two or three seats in the next Parliament.

“Shamir is trying to convince him to withdraw his resignation,” Pazner said.

Another man analysts saw as having his eye on the electorate Sunday was Sharon, a rival within the Likud of both Shamir and Arens.

‘Surrender to Foreigners’

“This was a surrender to foreigners,” the hawkish former defense minister commented. He charged that “the supreme creation of Israeli technology” had been “shot down in petty political intrigues.”

In a scathing blast at Peres and his Labor Party, whom he blamed for the decision, Sharon commented: “We’re speaking about people who have lost their faith. . . . They lost their honor, they lost their dignity, and they lost their national pride.”

Israel Aircraft’s managing director, Moshe Keret, meanwhile said the firm will now have to fire “thousands” of workers.

“It’s not the production of the Lavi that was at stake,” he said. “It was the production of military aircraft in Israel. And the decision today, in my opinion, has terminated that possibility for the foreseeable future.”

Angry Israel Aircraft workers blocked a main highway near the factory after Sunday’s announcement, and after a five-hour meeting of their works committee, they pledged “drastic” protest action. While they did not specify what they had in mind, they had talked earlier of blocking runways at Israel’s Ben-Gurion International Airport, which is adjacent to factory property.

“There will be a very strong reaction, I suppose,” said Shamir spokesman Pazner. “We will have a turbulent week.”