After more than 50 years, US engine-maker Pratt & Whitney is shutting down Israel factory

US jet engine-maker Pratt & Whitney has begun shutting down its Blades Technology Ltd. (BTL) compressor and turbine blades plant in Nahariya after more than 50 years, leading to the loss of about 600 jobs in Israel’s north.

The closure of the manufacturing plant, formerly owned by the Wertheimer family, comes after four years of struggle, including work stoppages and efforts by the Histadrut Labor Federation to find a buyer to keep its doors open.

In 2022, Pratt & Whitney announced that BTL’s production line would be gradually phased out as the Nahariya plant was incurring significant losses, and instead, decided to relocate manufacturing to the US.

The US manufacturer of precision forged and machined blades and vanes for the aerospace and industrial gas turbine industries has two factories in Israel’s north, one in Nahariya and one in Tefen. As a result of the Nahariya plant closure about 600 employees will be laid off through August, with some expected to take early retirement and another 150 to 200 to join the Tefen plant for jet engine blades.

The Israel Manufacturers’ Association on Tuesday expressed deep regret and concern over the factory closure and employee dismissals, citing the strength of the shekel against the dollar and the rise in the costs of input materials as factors making it difficult to continue manufacturing operations in Israel.

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“The closure of the factory is not a one-off event, but a warning sign,” said Israel Manufacturers’ Association president Avraham Novogrotzky. “The government must recognize local industry as a strategic security anchor of the country.”

Novogrotzky urged the government to take action and improve the business environment by reducing costs for the industry, with an emphasis on burdensome regulation, property tax rates, and land costs.

“Only competitive conditions will prevent the closure of the next factory and will ensure that Israeli and international factories will choose to expand and invest here in Israel,” he cautioned.

Opposition MK Vladimir Beliak, of the Yesh Atid party, on Wednesday called on the Knesset Finance Committee to hold an urgent meeting on the matter.

“While the government is busy with petty politics, the north is in a real crisis,” said Beliak. “The factory is another warning sign of the consequences of neglecting an entire region of the country.”

“The government must provide an appropriate response to employees and the self-employed who are being neglected in the north,” he said.

More than a decade ago, Pratt & Whitney, a subsidiary of Raytheon Technologies, took full control of BTL from the Wertheimer family. In 2014, industrialist Stef Wertheimer sold the remaining 51 percent stake of subsidiary Iscar Blades Technology to the US aerospace giant for an undisclosed sum estimated at hundreds of millions of shekels.

Wertheimer founded Iscar Blades in Nahariya in 1968 as a small manufacturing operation supplying the Israeli Air Force with spare parts before turning the company into a multinational corporation manufacturing all types of compressor and turbine blades.

BTL provides critical parts for the aerospace industry and has in recent years expanded into the gas turbine industry and the rapidly growing orthopedic implant market.