New Israeli Jet Fighter Under Fire by Critics : Debate Centering on Whether High Cost of Lavi Plane Is Justified

In a specially guarded hangar at the headquarters of Israel’s largest industrial company, engineers and technicians fitted a metal box about the size of a small filing cabinet into the rear seat of what will soon be the first flyable Lavi jet fighter-bomber.

Bright orange wires wound like veins beneath the partially completed greenish-yellow skin of the aircraft, linking the box--a flight-test instrument package--to sensors throughout the plane.

“So, you’re supposed to test-fly it in September?” a visitor asked his guide, the project’s chief test pilot, whose name may not be divulged under military censorship rules. “Not ‘supposed to test!’ ” the flyer responded sharply. “I will test-fly it.”

Such sensitivity reflects the controversy over what is by far the biggest and most expensive industrial project in Israel’s history. The debate has intensified even as the first full-scale development prototype of the Lavi, which means lion in Hebrew, nears completion.

Already, the project has consumed more than $1 billion in development costs over four years, a bill that has been paid almost totally by the American taxpayer as part of the annual $1.8-billion U.S. military aid package. And promoters of the project are counting on the United States to underwrite several billion dollars more to produce 300 aircraft.

U.S. Pays Most of Cost

Even with Washington picking up the lion’s share of the tab, however, critics say the Lavi is a luxury that Israel cannot afford at a time when almost every other military and civilian government program is being scaled back because of the country’s severe economic crisis.

“There is a definite risk that the Lavi may ultimately be not so much a lion as a huge white elephant,” the English-language Jerusalem Post said in an editorial not long ago.

Despite its critics, the project recently escaped some last-minute swipes of the budget cutter’s ax before the beginning of Israel’s new fiscal year April 1.

“It survived,” Menachem Meron, director general of the Defense Ministry, said in an interview. “The Lavi is alive and kicking.”

Meron acknowledged, however, that “the battle is never over until the end of the program.” And he said the next six to 12 months, when critical decisions regarding the Lavi’s production are expected, will be particularly fateful for the plane.

The object of the controversy is a surprisingly small and sleek-looking multipurpose fighter that officials here at Israel Aircraft Industries (IAI) say is designed to carry the country’s air force into the 21st Century.

Measuring only about 50 feet long, with a 28-foot wingspan, the Lavi will fly at about 1,300 miles an hour and will be a veritable laboratory of the latest computer and avionics technology, the project test pilot said. Its small size is “one of the biggest advantages,” helping to make the aircraft difficult to detect by enemy radar, he added. By comparison, the U.S.-built F-4 Phantom, a fighter of an earlier generation that the Israeli air force still uses, is about 63 feet long and has a 38-foot wingspan.

The prototype currently being loaded with instrumentation in IAI’s special hangar here is known as “B-1” and is scheduled for its first test flight in five months. If all goes according to plan, the first production aircraft are to be built in late 1990 or early 1991, with output quickly reaching a targeted 24 to 30 planes per year.

When operational, the Lavi is expected first to replace the U.S.-made A-4 attack bombers now being flown by the Israeli air force and then the Israeli-made Kfir fighter-bombers. The Kfir, modeled roughly after France’s Mirage III, has been in production since the mid-1970s.

IAI President Moshe Keret said in an interview that, including development and so-called initial procurement items such as spare parts and training, each Lavi will cost about $30 million.

He added that he believes the Lavi will cost less--”but, if not, it is in the same ballpark”--than the American-made F-16, which is often cited as a comparable aircraft, Keret said.

Enormous Cost

Even if his projections are correct--and there is considerable argument that they are far too low--the cost of the Lavi project is enormous in relation to the Israeli economy. By some estimates, the Lavi at its peak will devour as much as 5% of Israel’s gross national product, the entire value of goods and services produced here each year.

It already represents “about one-quarter of our activity,” said Shmuel Peretz, IAI’s deputy vice president for finance. With more than 20,000 employees and annual sales of more than $900 million, IAI is Israel’s largest enterprise.

Relative to the size of the country, the economic impact of the Lavi program compares to that of the American race to land men on the moon during the 1960s.

Backers of the project argue that it will bring Israel major benefits comparable to those that the United States derived from the space program. The scientific spinoff will help build a high-technology industrial base that will serve Israel decades into the future, they say.

Militarily, its proponents say, the Lavi is most important not as a tool that will help win a war but as a deterrent that could prevent one from happening.

“When we go and buy an F-16, the Arabs know we have an F-16,” said Moshe Arens, former defense minister and now a minister without portfolio, in a recent interview with the Jerusalem Post. “When we build a Lavi, they don’t know what we have. All they know is that this tiny nation here was able to put together the best plane in the world, crammed with locally designed and developed advanced technology. And then they have to ask themselves, ‘What else have these people been able to do?’ ”

Ironically, the latest evidence of opposition to the project has come largely from the military.

The defense budget is under unprecedented pressure, these critics point out, with hundreds of career officers having been trimmed from the standing army and training activity slashed below what some consider a bare minimum. There is even some discussion of closing bases. While the critics agree that, in theory, the Lavi would be nice to have, they say that, given the economic realities, the money now being spent on the project is needed more elsewhere.

Fueling the economic debate are some new American estimates that the cost of Lavi production will exceed what IAI is forecasting by about 65%. A team of U.S. experts that has been monitoring the project tabled the new estimates during a visit in February, and they are now under study.

The Defense Ministry’s Meron conceded: “It’s important, because if the cost of the aircraft will turn out higher than we estimated, then we’ll have to reassess our program.”

However, IAI’s Keret pointed out, original American estimates were that development costs for the fighter would be at least twice as high as Israeli forecasts. Now, however, the U.S. estimate has come down to within about 12% of Israel’s, a difference that Meron called “negligible.”

As the project’s proponents put it, the fact that the Lavi has been financed so far almost exclusively with American money is only another reason not to cancel it. For Israel to write off $1 billion of U.S. aid money in that way would embarrass its friends in the U.S. Congress and severely damage its chances for future U.S. help, they say.

The Pentagon and American defense contractors have consistently opposed the Lavi program, in part because if Israel did not build its own new fighter, it would almost certainly buy more American planes. But publicly, at least, the U.S. government has said the decision is completely up to Israel.

Here, five successive defense ministers have reviewed the program and wound up endorsing it. At the last Cabinet vote on the subject, late last summer, only two ministers were opposed.

“I haven’t seen any erosion in the Israeli political Establishment” regarding its support for the program, Keret commented.

The government will undoubtedly review the program again this year, since, as Meron noted, “the major (production) decisions would have to be taken between six months and a year from now.”

McDonnell Interested

Keret confirmed that there have also been discussions with American aerospace companies about possible joint production of the Lavi, a move that would help deflect criticism of the project. While he is always interested in joint ventures, he added that “I wouldn’t go into a venture like this just to take away criticism.”

The Jerusalem Post reported last week that McDonnell Douglas is interested in joining the Lavi project and that Keret is slated to visit St. Louis next month, together with Defense Ministry officials, to discuss a joint production deal.

Even as it stands, Keret said, about half the content of the airplane, including its engine and wings, will be American-made.

The IAI official said he can appreciate the concerns of critics, but “while I can understand the criticism, I absolutely can’t accept it.” He argued that because of the program’s importance for the future of the entire Israeli economy, it would be disastrously short-sighted to sacrifice the Lavi to more immediate needs.

The project test pilot and his colleagues are also strong advocates of the Lavi, but for another reason. It was the first time, the test pilot said, that Israeli pilots have taken an active role in the design of a plane intended for their use.

“We never had a chance to sit with a project officer and give our ideas about how the aircraft should be designed. We had to buy whatever the U.S. designed and built,” he said. Pointing out features of the instrumentation in a mock-up of the cockpit, the pilot boasted: “None of the engineers designed it. We designed it. It’s for us.”