Lavi Fighter: Maiden Flight Its Last?

By John T. Haldane

When most Americans think about Israel these days, it is related to Tel Aviv's complicated role in the Iran-contra affair. However, a serious behind-the-scenes struggle has been going on between Washington and Tel Aviv for many months now concerning US funding for Israel's attempt to develop a light multi-mission fighter plane named the "Lavi." As we reported last August ("The Lavi Fighter: Lion or Lemon?"), the United States already has committed about $2 billion to the Lavi program. The Pentagon estimates now indicate that total research and development costs will reach at least $11.8 billion, $3.8 billion over Israeli estimates. Given the sad state of the Israeli economy, Israel again is looking to US taxpayers to provide yet more funds, regardless of Gramm-Rudman foreign air restrictions.

Last December was the crucial month for Israeli plans to present a Lavi "fait accompli" to the Reagan administration. Tel Aviv knew that it would be receiving a top-level Pentagon team of engineers and cost analysts, headed by Dr. Dov Zakheim, Deputy Undersecretary for Planning and Resources, on January 5. Thus the president of Israel Aircraft Industries (IAI), the Lavi's manufacturer, proudly announced on December 31 that the fighter had made its first flight, testing its flight control, engine and stability augmentation and control systems.

American critics of the Lavi program were not impressed by this maiden voyage, almost a year behind schedule. "We were told in February 1985 that the flight would take place in February 1986," one US expert said. He adds that the Lavi flew without weapons and without the projected Lavi avionics and electronics. Other American officials suggested that the flight demonstration was "political," timed to precede Zakheim's visit to discuss the plane's future.

Israel began developing the controversial Lavi in 1974. It will be unable to produce one before 1992, five years from now. More than $1.5 billion, most of it in US aid, has already been spent on the plane. The annual $550 million in development costs come out of US military grants to Israel.

Ironically, the Lavi is more American than it is Israeli. Its PW 1120 engine is made by Pratt & Whitney, while Grumman Aerospace Corp. provides the graphite composite wings and tails. Garrett, Lear Siegler and Goodyear also are major participants in the program.

The visit by Deputy Undersecretary Zakheim, who is a rabbi as well as a US government official, was to convince the Israeli Government that the Lavi is neither a military necessity nor a project appropriate to Israel's financially strapped economy. Zakheim brought a list of five manufacturing alternatives, all of which the Pentagon contends would be cheaper and more practical than the Lavi. One offer is said to be to supply up to 300 F-16s, giving IAI licenses to provide 50 percent of the engine parts, and to make final assembly. Under another offer, Israel would supply Lavi avionics for the F-16. Yet another alternative is for Israel to buy 50 F-15Es, a new US long-range strike fighter, and 250 Harrier aircraft.

As Gerald Green pointed out in the December issue of National Defense: "Pentagon spokesmen believe Israel can satisfy its fighter needs better by concentration of its high-tech efforts in electronics where it has a proven capability and its opportunities for success in the international marketplace are much greater, and installing its indigenous avionics in appropriate US-produced aircraft."

At a January 7 press conference in Tel Aviv, Zakheim said the Pentagon estimated that the Lavi would cost 45 percent more than the $15.2 million per plane that Israel has projected. For this reason, Zakheim emphasized: "Israel, I think, would have to recognize—and I know its decision makers do recognize—that the decision to go with the Lavi involves a real risk that if the Lavi's costs either grow or are indeed higher than Israel currently estimates, there will be other programs that will suffer simply because the $1.8 billion in annual US military assistance is a hard and fast ceiling."

Pentagon officials have pointed out that any of the alternatives would cost only about half what the Lavi will finally cost, and would provide continued work for thousands of Israeli engineers and technicians. Also, planes would be provided to the Israeli air force three to four years sooner than the Lavi.

During his visit, Zakheim delivered letters from Secretary of State Shultz and Secretary of Defense Weinberger urging their Israeli counterparts to "give serious consideration" to the proposals. These letters certainly were written in part as a result of continued pressure from American aircraft manufacturers, who long have bitterly complained to the Pentagon and Congress that US foreign aid money is going to Israel to develop a modern fighter plane directly competitive with their own products.

The Washington Post noted the Zakheim visit with a January 19 editorial saying: "Of the military aid this country gives Israel each year, up to a fourth now goes not to buy weapons, but to help the Israelis develop and build one of their own—a fighter plane called the Lavi. That unusual arrangement would be fine, except that the Pentagon says it can sell the Israelis a comparable US plane for less, while the Lavi will eventually 1) require a huge increase in US aid, 2) strain the Israeli economy by siphoning off even more funds for the military, or 3) unbalance the military by stripping Lavi funds from other sources." The editorial concluded: "Well over $1 billion has been spent. Some will offer that as an argument not to stop now, but it shouldn't be. The Lavi has a heavier burden of proof than it has so far been able—or called upon—to meet."

The critical problem that Tel Aviv faces is that the Lavi project is considered to be much more than the mere development of a fighter for the Israeli air force. It is the largest high-tech project Israel has ever attempted and can be said to compare in economic and patriotic impact to the US space program. This explains why, in the face of sky-rocketing costs, the Lavi project continues to receive such strong support within the Israeli military-industrial complex. IAI alone employs over 4,000 engineers and technicians who would be unemployed if the Lavi program were to be cancelled.

Hundreds of badly needed engineers and specialists already leave Israel each year for better paying jobs abroad. Those who remain in Israel earn only about $2,000 monthly, and face income taxes that can climb to 75 percent of their salaries. A February 16 article in Forbes pointed out the crippling effect of the continuing "brain drain" on the Israeli economy. It stated: "One statistic Israelis pay a lot of attention to is the government's annual accounting of net migration—the difference between the number of Jews settling in Israel and the number who leave. Lately the numbers have been discouraging. Last year more left than arrived for the third time since 1980. Government experts think economic uncertainty drives people out, rather than the rigors of living at the flashpoint of Mideast tensions."

Tel Aviv has its back to the wall on the Lavi program. The country's defense budget is about to be cut for the third year running. America's generous support for the Lavi has helped Israel to continue developing other locally-made weapons, such as its Merkava tank and a new generation of missile boats. But the cuts are beginning to tell. Israeli pilots are spending fewer hours in flight training, for example. Some Israeli defense experts say that stubbornly going ahead with the Lavi will mean canceling plans for modernizing the navy. Israel's chief of staff, General Moshe Levy, told the Knesset on January 6 that, given the choice, he would not have started the Lavi project in the first place. His probably successor, General Dan Shomrom, favors cancellation. Gerald Green seems to concur, noting in his article: "For its part, Israel owes the US its serious consideration of US-proposed alternatives. Israel must also consider the impact of a large share of its military budget going to the Lavi program. Its army and navy could be severely affected."

Most American aviation analysts consider that Israel will study the five US proposals and select the one most advantageous to the Israeli economy. However, one expert believes that Israel, in a final fit of old fashioned chutzpah, will not only push ahead with the Lavi program but will attempt to enter a prototype in the next Paris international air show in an effort to attract foreign buyers. A rumor to this effect may already be going around Washington, since Deputy Undersecretary Zakheim has been quoted as saying that the United States has absolutely no interest in purchasing the finished product and might also exercise its option to veto sales of the Lavi to other nations, an option the US holds since about 55 percent of the fighter is manufactured by American firms.

If Tel Aviv scorns the reasonable US alternatives, it means that Israel believes it has the new US Congress in its pocket and it therefore can dare to ignore the intense pressure from the US Departments of State and Defense. If history is any guide, Israel may be right.

John T. Haldane is a specialist in Middle East affairs who has served as a Foreign Service Officer in Baghdad, Cairo, and Beirut, and as an international economist with the Departments of Commerce and Treasury.