The board of Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) has approved development of a new executive jet, which will be marketed by US company Gulfstream. The new executive jet, which will target the world's wealthiest, will be an advanced model of the G280, which it has been producing since 2012. The new executive jet is currently called P-32 at IAI but in the future it will be given a commercial name, Globes reports.
Over the past decade, IAI's executive jet operations have incurred huge losses. The 2008 financial crisis hit sales hard and in recent months IAI has been considering getting out of the executive jet business altogether.
IAI will invest $80 million in developing the new executive jet and Gulfstream will invest a matching amount.
More than 1,000 employees at IAI are engaged in executive jet operations and IAI has come under heavy pressure from the workers committee not to jettison this area of activity. Sources close to this subject say that IAI was keeping the decision on whether to continue development of the executive jet as a bargaining chip in its overall negotiations with the workers committee on the new collective agreement for the entire company, which is being formulated.