Beginning of the end? Israeli arms firm Elbit's finances crumbling

Kit Klarenberg

On November 29, the leading Israeli weapons manufacturer Elbit Systems posted its third-quarter results for the year 2022. It showed a massive drop in the company’s profits, amounting to $32.8 million year-on-year.

Markets quickly responded by sending the company's stock price crashing by an unprecedented 10.6 percent.

This precipitous decline occurred despite, as Elbit CEO Bezhalel (Butzi) Machlis boasted in a statement accompanying the results, “elevated geopolitical tensions and growing defense budgets [creating] multiple opportunities” for the company.

He parenthetically attributed the loss to “the impact of global supply chain disruptions,” which he asserted has forced the company to increase its inventories to “maintain timely deliveries to our customers.”

While the war in Ukraine has certainly inflicted havoc on global trade, Elbit faces disruptions to its supply chains from a very different source -- Britain-based direct action group that campaigns to end the UK's complicity in Israeli apartheid, Palestine Action.

To evict the arms company from factories and premises it inhabits on British soil while deranging its operations to stem the flow of deadly wares to the Israeli regime and drawing attention to the company's complicity in Zionist war crimes is Palestine Action’s raison d’etre.

On top of Elbit’s vastly-reduced profits, there have been numerous other indications in recent weeks that suggest the collective's indefatigable efforts on these fronts are having a material impact on the Israeli arms company's functions inside Britain.

A series of answers given by Alex Chalk, Britain’s defense procurement minister, towards the end of November in response to parliamentary questions revealed that three key contracts with the Ministry of Defense from which Elbit was set to reap millions are either being reviewed, renegotiated or have ceased.

In May this year, Elbit was awarded a $197 million contract to design and deliver training for the Royal Navy Dreadnought Crew Training program, over seven years.

In particular, the company was expected to provide “shore-based simulators and training aids,” ahead of the deployment of a new class of Dreadnought submarines, which comprise Britain’s Trident nuclear deterrent.

It was one of the biggest contracts secured by the Israeli company in recent years.

Fast forward to November 24 though, and in response to a parliamentary question from Labor shadow defense secretdefensen Healy, Chalk stated that as a result of a recent review of “capability programs”, the Ministry of Defense requested Elbit’s “departure” from the Dreadnought Crew Training program.

“This has not happened because of any specific issues with Elbit Systems UK or any wrongdoing on their part but rather a result of applying revised operational sovereignty standards for the UK’s highest priority capabilities,” Chalk claimed.

He added that the company “remains an important and trusted partner across a range of other contracts in defense,” whicdefenseow sounded contradictory given that a decision was made not to grant Elbit operational sovereignty. In other words, access to and control over sensitive British defense systems and operational areas.

That strongly implies that under those “revised standards”, the firm wasn’t in fact “trusted” by the British government, for one reason or another.

Nonetheless, Elbit still holds several contracts with the British Ministry of Defense. The future of at least two of them seems uncertain at best.

 In January 2021, the company was awarded $134 million over five years to provide the British Army with “Dismounted Joint Fires Integrators” - “detect and destroy” systems.

On November 14, in response to a parliamentary question from Labor shadow defense procurement minister Chris Evans, Chalk said the systems had been designed, and the arrangement with Elbit was “currently under review” by the Ministry of Defense, “after which a decision will be made on the way forward.”

That decision could well be negative for Elbit, given its involvement in Project Selborne, a Royal Navy training program delivered by a consortium of companies and led by notorious outsourcing giant Capita, which appears to be coming to a close.

In January 2021, Elbit announced that it had been awarded a $150.4 million contract under Project Selborne to run for 12 years. The company was charged with modernizing legacy training systems for the British Army, Royal Air Force and Navy.

At the time, it boasted of how the deal would create new jobs locally, stimulate British innovation, and foster “UK skills in the long term.”

Responses to many parliamentary questions in November about Elbit’s continued involvement in the venture strongly suggest the company is on its way out.

The reasons apparently cannot be disclosed presently due to “commercial sensitivities,” although on November 7, Chalk confirmed that negotiations were underway regarding Elbit Systems UK's departure from Project Selborne.

This was reiterated eight days later, and again on November 24, when Chalk confirmed Elbit had as of October 31 already received $35 million in British funding for its work on the project.

Elbit’s staggering fall and rapidly collapsing fortunes are all the more notable given the fact that the company enjoys deep ties with the British state, to the extent it could be argued it operates as its effective wing.

That, of course, means Palestine Action’s battle against the company is far from over, and the victory is likely to be hard-won.

Nonetheless, while this may not be the end or the beginning of the end, it could just be the end of the beginning.

Kit Klarenberg is an investigative journalist and MintPresss News contributor exploring the role of intelligence services in shaping politics and perceptions. His work has previously appeared in The Cradle, Declassified UK, Electronic Intifada, Grayzone, and ShadowProof. Follow him on Twitter @KitKlarenberg.

(The views expressed in this article are the author's own and do not necessarily reflect those of Press TV.)

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