Israel Aerospace Industries Ltd.
CEO Yitzhak Nissan will step down when his contract expires at the end of the year, and retire, he and IAI chairman Dov Baharav agreed a few days ago.
Nissan had wanted to renew his contract, but Baharav refused. Baharav, who was appointed to his post in October 2011, will establish a search committee to seek Nissan’s successor. The company reportedly wants to recruit a CEO with a financial background, even though Baharav, formerly CEO of Amdocs Ltd. has no defense experience.
Since Baharav took up his post, relations with Nissan have been tense beneath the surface and full of mutual suspicion. Sources close to the two men have believed for a while that an explosion was only a matter of time. Baharav reportedly lacks confidence in Nissan’s ability to lead IAI through its privatization in the coming years, and prepare alternative products for the expected drop in demand for weapon systems in view of economic crises.
Nissan (66) will reach retirement age this year, but he believes that he can and should keep his job. His predecessor, Moshe Keret retired at 72. However, Baharav was unimpressed by Nissan’s plans, and his decision not to renew Nissan’s contract will in his view set a new policy at IAI: an end to the era of being an incubator for superannuated dinosaurs.
Despite the tensions between Baharav and Nissan, they have been careful to outwardly show that it’s business as usual at IAI. Over the past two months, they have strongly denied all reports about changes in the company’s executive. Baharav’s aides have said that ousting Nissan was out of the question, because he’s a great salesman, while Baharav is new to the job, and he will want a professional who knows the business inside and out.
Nissan, for his part, is hurt and angry. Although he kept a poker face today, and did not display his emotion, other IAI executives and defense establishment officials expressed shock at Baharav’s decision, especially in the wake of IAI’s $1.1 billion arms deal with India, which boosts the company’s orders backlog to $10 billion.
“To bring home a deal of this size is no easy thing, not in the present market, or in the current economic climate, and it is doubtful if any person brought in as IAI’s CEO would be able to do something like this,” an executive at another defence company told “Globes”. “It is doubtful if Nissan has said the last word in his career. He is at his peak, and he’ll join another big company.”
Source: Globes