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Sunday, November 11, 2012

Turkish dollars trump Israeli sense again

Apparently under pressure from Boeing Corp. (which announced massive layoffs from its defense division right after last week's US election), Israel Aircraft Industries has agreed to resume manufacture of spy systems for the Turkish Air Force's Boeing 737's (Hat Tip: Asher G).
Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) unit ELTA Systems has decided to restart the manufacture of electronic measures systems the Turkish Air Force's Boeing’s 737 early warning and control Systems spy aircraft, "informed sources" have told Turkey's "Hurriyet Daily News."
The newspaper added that the decision paves the way for the release of Boeing’s long-delayed four 737 planes, which were built for a total of $1.6 billion. The Turkish daily also speculated that the decision to supply the critical devices may also mean an end to Israel's two-year defense exports ban for Turkey. The sources said that with the decision to continue production recently, the manufacture of a third plane approached completion. ELTA had finished the production of the EMS systems for the first two aircraft years ago.
"Hurriyet Daily News" recounted that in 2002, Turkey’s defense procurement agency, ordered four 737-700 AEW&C aircraft from Boeing, ground radar and control systems, plus ground control segments for mission crew training, mission support and maintenance support. Under the agreement the four aircraft were supposed to be released in 2006. But the integration of the planes took much longer. ELTA is building the EMS systems for four aircraft and its Turkish systems are expected to cost more than $100 million.
The ELTA decision follows Boeing’s efforts to urge the Israeli company to restart this Turkish manufacturing. Elta is the single producer of the EMS systems for Boeing’s 737 aircraft. The 737 Boeing AEW&C aircraft are to be used as part of Turkey’s NATO capabilities.
What could go wrong?

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