Elbit Systems: Difference between revisions

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Elbit Systems Ltd

Company type	Public
Traded as	TASE: ESLT Nasdaq: ESLT
Industry	Defence Electronics
Founded	1966; 58 years ago (1966)
Headquarters	Haifa , Israel
Key people	Michael Federmann (Chairman) Bezhalel Machlis (CEO and President)
Revenue	US$5.28 billion (2021)
Operating income	US$419 million (2021)
Net income	US$275 million (2021)
Total assets	US$9.32 billion (2021)
Total equity	US$2.55 billion (2021)
Number of employees	17,787 (2021)
Subsidiaries	Elbit Systems of America Elbit Systems Electro-Optics - Elop Elbit Systems Land and C4I Elbit Systems EW and SIGINT – Elisra
Website	www.elbitsystems.com
Footnotes / references [1]

Elbit Systems Ltd. is an Israel-based international defence electronics company engaged primarily in mil-tech/defense contracting.

Elbit Systems and its various subsidiaries provide various technology solutions for military command, control, communications, intelligence surveillance, and reconnaissance (C4ISR) purposes, including unmanned aircraft systems (UAS), electro-optics hardware, electronic warfare and signal intelligence (SIGINT) systems, and radio/communications products. In 2016, Elbit Systems had approximately 13,895 employees.^[2] Elbit Systems' shares are traded on the Tel Aviv and NASDAQ stock exchanges.

History and Structure

Early years

Elbit Systems was founded in 1966 by Elron Electronic Industries (TASE ELRN) under the name of Elbit Computers, delivering logistic-support weapon delivery and navigation systems for Israeli aircraft, establishing a combat avionics package for the IAI Lavi fighter aircraft, and producing a fire-control system for the Merkava tank.^[3]

1996 IPO on NASDAQ

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In 1996, Elbit was spun off into three independent companies:

• Elbit Medical Imaging (NASDAQ EMITF) – During 1999 to 2000 Elscint (Another affiliate of Elron) and Elbit Medical Imaging sold their imaging activities to General Electric Medical Systems and to Picker (now part of Philips Medical Systems) for approximately $600 million.
• Elbit Systems (NASDAQ ESLT) – Created as the defence electronics arm of Elbit, currently with a market cap of over $5 Billion.
• Elbit – which focused on communications activities and in 1999 led the consortium that founded Partner Communications Company (NASDAQ PTNR), Israel's first GSM operator. In 2002, Elbit was merged into Elron. Elron sold its shares in Partner during 2003–2006 for approximately $160 million.

Merger with El-Op

In 2000, Elbit Systems merged with El-Op (then controlled by current Elbit chairman, Michael Federmann),^[4] creating the largest non-governmental defense electronics company in Israel. Elron sold its shares in Elbit Systems for approximately $200 million in 2004.^[5] Following the merger with El-Op, Federmann become the largest shareholder of the combined group.^{[citation needed]}

Following its merger, Elbit acquired Elisra, assets of Israel Military Industries’ Aircraft Systems Division, and Mikal Ltd (the company initially purchased 19% of the firm, and later agreed to acquire Mikal's 100% holdings in Soltam Systems, Saymar, and the 87.85% portion of ITL held by Mikal; in exchange, Mikal's owners received the 19% of Mikal that Elbit had purchased).^[6] Elbit subsequently announced a cash tender offer for the 12.15% remainder of ITL held by the public.^[7]

Subsidiaries

• IMI Systems

Former holdings and spin-offs

• Chip PC Technologies (TASE CPPC) – a developer and manufacturer of thin client solutions for server-based computing; Elbit acquired 20% of the company in 2006.^[8]
• Everysight – a developer and manufacturer of an augmented reality smartglasses for cyclists, founded in 2016.^[9]

Israeli Military

Elbit Systems is the largest Israeli military manufacturer and produces 85% of Israel Defense Force's military tech as well as 85% of the drones used by the Israeli Air Force. Elbit advertises that its equipment has been battle-tested by the IDF^[10] in operations in Gaza and the West Bank, and Elbits drones have been implicated in multiple incidents that involved the death of children and civilians.^[11] While Israel does not officially acknowledge that its drones are used to carry out strikes in Gaza or elsewhere, in 2016 it was revealed that US and UK intelligence agencies had been tapping into Israeli drone video feeds, some of which revealed the extent of Israel's weaponization of its Elbit Hermes drones via the presence of on-board missiles.^[12]

In August 2019, Elbit Systems won an Israel Ministry of Defense contract to install the Iron Fist active protection system on the IDF's new Eitan AFV and the IDF's fleet of armored D9 bulldozers.^[13]

Global presence

Europe

Azerbaijan - Israel supplies Azerbaijan advanced military equipment and helps train its army; as a part of the cooperation between the two states, Elbit Systems opened an office in Azerbaijan in 2011, with plans to build a plant for the joint production of unmanned aerial vehicles.^[14] Elbit was reported to have – discretely – played a major role in arming the Azeri military in the decades leading up to the Nagorno-Karabakh conflict.^[15]

Belgium – On 1 July 2003, Elbit acquired OIP Sensor Systems.^[16]

France – On June 19, 2011, Elbit announced that its subsidiary Elisra Electronic Systems Ltd. was awarded a contract valued at approximately €5 million to supply hundreds of units of its AN/PRC-684 Personal Locator Beacon to the French Ministry of Defense, equipping the French Air Force, Army, Navy and DGA (Direction Générale de l'Armement). ^[17]

Germany – Elbit Systems bought the radio communication division of the former Telefunken. In 2020 it became Elbit Systems Deutschland GmbH & Co. KG. Elbit builds the E-LynX SDR radio system for the German Bundeswehr for the armored forces, night vision and thermal imaging devices and Directional Infra-Red Countermeasure (DIRCM) for the A400M, radar warning receiver and EW controller for the CH-53GS/GE.^[18]

Italy – On June 22, 2011, Elbit announced that it was awarded a three-year, $15 million USD contract by Elettronica S.p.A. to participate in a program to supply the ELT/572 DIRCM (Directed Infra-Red Countermeasures) system for installation on various platforms of the Italian Air Force, including the C130J, C27J and AW101.^[19]

Romania – Elbit Systems' activities in Romania, which started in 1996, are primarily carried out through its wholly owned Romanian subsidiaries, Elbit Systeme S.A., A-E Electronics S.A, Elmet International SRL and Simultec SRL, which employ approximately 400 employees.^[20] On May 24, 2011, Elbit announced that its Elisra Electronic Systems Ltd. Romanian subsidiary was awarded, in cooperation with other Romanian companies and led by the Romanian Aeronautical Industry, a four-year contract valued at approximately $18.6 million to upgrade the Romanian Air Forces' C-130 transport aircraft.^[20]

Sweden - On June 17, 2021, Elbit Systems announced the establishment of its Swedish subsidiary "Elbit Systems Sweden".^[21] On January 13, 2022, Elbit Systems Sweden was awarded with a contract to supply combat management systems to the Royal Swedish Navy.^[22][23] On January 24, 2023, Elbit Systems Sweden announced that it was awarded a contract valued at approximately $48 million to equip the Swedish Armed Forces with new mobile tactical communications stations.^{[24][25][26][27]} According to the contract, Elbit Systems Sweden is to develop and deliver two Technical High Mobility Shelter (THMS) variants, the RL HYTT 24A and RL HYTT 24B.^[27][26]

United Kingdom

Elbit Systems Uk Ltd. was incorporated on September 24, 2004, as a holding company for Elbit's activities in the United Kingdom.^[28] As of 2023, it has multiple UK subsidiaries across sixteen sites in the country, employing over 680 people.^[29]

The company was incorporated after Elbit and Thales Group of France, won a tender (code named "Watchkeeper program") to supply the British Army with unmanned aerial vehicles.^[30] The tender condition included a requirement to set up a local manufacturing facility for the program,^[31] therefore, at the end of 2005 a joint venture company was established, with the Thales Group, named "UAV Tactical Systems Ltd (U-TacS)", based in Leicester to manufacture the Watchkeeper WK450.^[32] A flight testing facility was also set up at ParcAberporth in West Wales.^[33]

In 2007, Elbit acquired Ferranti Technologies, based in Oldham, Greater Manchester, a company that was part of the historic Ferranti group and provided solutions in the aerospace and defence markets.^[34] In 2022, Elbit went on to sell its Ferranti subsidiary for nine million pounds, approximately £6m less than it had purchased it for fifteen years prior, possibly partially in response to escalated activist protests at the company's involvement in the killing of Palestinians in Gaza.^[35]

In February 2016, Affinity Flying Services Limited, a joint venture between Elbit and Kellog, Brown and Root was awarded a £500 million contract to manage the "UK Military Flight Training System" (UKMFTS) program for the Ministry of Defence to deliver aircrew training for over an 18-year period.^[36]

North America

United States – Elbit owns several companies in the United States through its American subsidiary, Elbit Systems of America (ESA). Elbit Systems of America operates under a special security agreement with a proxy board, allowing it to function independently and separately from its parent company.^{[37] [38]} Elbit Systems of America (ESA) is incorporated in Delaware.^[39]

• EFW in Fort Worth, Texas (the EFW facility also houses ESA's home office)
  • EFW manufactures components for the F-16, V-22, and Bradley Fighting Vehicle, among other programs. It was initially the electronics manufacturing facility for General Dynamics operations in Fort Worth; when GD sold its aviation business to Lockheed Martin, the latter was not interested in the facility which it then sold to Elbit.^[40]
• IEI in Talladega, Alabama (formerly International Enterprises, Inc.)
• Kollsman Inc. in Merrimack, New Hampshire (originally founded in 1928 by Paul Kollsman). Kollsman is a subcontractor to Boeing on SBInet, a security system for the U.S.-Mexico border developed for the United States Department of Homeland Security.^[41]
• Talla-Com in Tallahassee, Florida
• Innovative Concepts, Inc. (ICI) in McLean, Virginia, purchased in November 2008 from Herley Industries^[42]
• VSI in San Jose, California (a joint venture with Rockwell Collins, formerly known as Vision Systems International; Elbit and Rockwell Collins each own 50%)
• UAS Dynamics in Fort Mill, South Carolina (originally a 50–50 joint venture with General Dynamics Armament and Technical Products; on December 1, 2011, Elbit purchased GD's 50% share)^[43]
• M7 Aerospace, formerly Fairchild Dornier Aviation in San Antonio, Texas^[44]
• Night Vision division of Harris (previously from Exelis, itself a spinoff from ITT) in Roanoke, Virginia, purchased on September 15, 2019.

In 2014, Elbit Systems won a two-year, $12.7 million contract for the supply and provision of Apache Aviator Integrated Helmets for the US Army helicopter fleet.^[45]

On March 22, 2018, Elbit Systems and Universal Avionics announced that Elbit would be "completing the acquisition of the privately owned U.S. company Universal Avionics Systems Corporation [UASC] through an asset acquisition agreement." ^{[citation needed]}

In 2019, Elbit Systems purchased the night vision business of Harris Corp. (which had earlier acquired Exelis Inc., previously of ITT Inc.) for $350 million with Harris's merger with L3.^[46][47]

In April 2019, Elbit Systems announced that it had partnered with DA-Group to produce and advertise its anti-jamming devices for global navigation satellite systems.^[48]

South America

Brazil – In 2001, Elbit Systems Group completed its purchase of Aeroeletronica (AEL), a Brazilian company in the defense industry.^[49] In January 2011, Elbit announced that it had bought two additional Brazilian companies: Ares Aeroespecial e Defesa, and Periscopio Equipamentos Optronicos.^[50] In April 2011, the Brazilian Embraer entered into a strategic agreement with AEL Sistemas S.A ("AEL"), a subsidiary of Elbit Systems. According to officials from the two companies, one of the primary goals of the Embraer-majority joint venture was introduce the Elbit Systems Hermes 450 UAV into the service of the Brazilian Air Force.^[51]

Colombia – In March 2010, a $28 million contract for Hermes 450 UAVs was suspended by the Colombian government after media reports based on anonymous letters alleged that Colombian officials had been bribed.^[52][53] The Israeli Ministry of Defense investigated and found that the letters likely came from Israel Aerospace Industries, a competitor that lost the tender.^[52] The incident led to a review of the regulations governing overseas competition between Israeli defense companies.^[52]

Southeast Asia

Philippines – Elbit won its first contract in the Philippines for the supply of upgraded armored personnel carriers to the Philippine military back in June 2014. The upgrade included 25mm unmanned turrets, 12.7 mm remote controlled weapon stations (RCWS) and fire control systems (FCS) for 90 mm turrets.^[54][55] In 2015, the Armed Forces of the Philippines received 114 M113 tracked APCs from the United States,^[56] with Remote Control Weapons System (RWS) designed by Elbit.^[57]

On October 23, 2020, amid the COVID-19 pandemic, Elbit won contracts to produce 18 Sabrah ASCOD Light Tanks and 10 Pandur II Tank Destroyers along with 1 ASCOD 2 Armored Command Vehicle, 1 ASCOD, and 2 Armored Recovery Vehicles, as well as another contract to supply 28 Iveco VBTP-MR Guarani APCs for the Philippine Army's Light Tank and APC Acquisition Projects.^[58]

Confirmed and alleged security incidents, spyware, and backdoors

In 2016, it was revealed by The Intercept that, starting in 2008, the US NSA and UK GCHQ intelligence agencies had been tapping into live feeds from Elbit drones (among other Israeli air force equipment) as they were flown on missions by the Israeli military and air force against targets in Gaza, the West Bank, Syria, and Lebanon.^[12]

On 6 December 2017, Citizenlab published a detailed report that showed that Ethiopian dissidents and journalists in the US, UK, and other countries were targeted by sophisticated commercial spyware, sold and operated by Cyberbit, a wholly owned subsidiary of Elbit Systems.^[59][60] Director of Citizenlab, Ronald Deibert, said "the findings raised questions about the company's human rights due-diligence practices and processes for preventing misuse of its software."^[61] In a reply to an inquiry from Human Rights Watch on the topic, Cyberbit did not deny selling this kind of technology, and rejected responsibility for its possible misuse on its customers.^[62]

In April of 2021, the Australian Army announced that Elbit's battlefield management system would be withdrawn from use with short notice, effective May 15, 2021. The Australian Broadcasting Corporation reported that this was due to concerns regarding the Elbit system's security.^[63] An Australian Financial Review columnist stated that the security problems comprised "a “backdoor” security vulnerability reportedly uncovered by the Australian Signals Directorate".^[64] The Australian Defence Magazine also reported that the system had failed two security milestones during 2020.^[65] Elbit denied that the system posed any security risks.^[63]

Ethical concerns and divestment

A number of financial and investment organizations have divested their interests in Elbit, specifically:

On September 3, 2009, the Norwegian Pension Fund's ethical council decided to sell the fund's stocks in Elbit due to the corporations supply of surveillance systems for the Israeli West Bank barrier.^[66] At a press conference to announce the decision, Minister of Finance Kristin Halvorsen said "We do not wish to fund companies that so directly contribute to violations of international humanitarian law". The Norwegian Ambassador to Israel, Hans Jacob Biørn Lian, was called to a meeting at the Israeli Foreign Ministry where the decision was protested.^[67]

In January 2010, Danske Bank added Elbit to the list of companies that fail its Socially Responsible Investment policy; a bank spokesman noted that it was acting in the interests of its customers by not 'placing their money in companies that violate international standards'.^[68][69] The Danish financial watchdog Danwatch has also placed Elbit on its ethical blacklist in 2011,^[70] and in 2014, one of Denmark's largest pension fund administrators PKA Ltd announced it will no longer consider investing in Elbit, stating "The ICJ stated that the barrier only serves military purposes and violates Palestinian human rights. Therefore we have looked at whether companies produce custom-designed products to the wall and thus has a particular involvement in repressive activities."^[69]

In March 2010, a Swedish pension fund, not wanting to be associated with companies violating international treaties, boycotted Elbit Systems for its involvement in the construction of Israel's West Bank barrier wall.^[71]

In December 2018, HSBC divested from Elbit,^[72] following Elbit's acquisition of IMI Systems, with HSBC citing IMI's manufacturing of cluster bombs, which violated the bank's ethics policy of not investing in companies linked to the manufacturing or marketing of cluster munition.^[73]

In 2019, Axa partially disinvested from the Israeli arms group Elbit Systems following pressure from the Boycott, Divestment and Sanctions movement.^[72][74][75] The move followed several years of campaigning by NGOs, including an April 2018 petition launched by SumOfUs that received 140,000 signatures, leading Axa to “quietly reduce” its investments in Elbit and Israeli banks.^[72] Axa remains indirectly invested in Elbit and Israeli banks through a non-controlling interest in its former subsidiary Alliance Bernstein.^[72][74]

In 2023, it was reported that Elbit (along with other Israeli defense manufacturers) had played an extensive role in discretely arming the Azeri army for the Nagorno-Karabakh conflict that culminated in accusations of an Armenian genocide.^[15]

Activists protests

Following the 2014 Gaza War, activists from Palestine Action and other groups began protesting outside Elbit UK subsidiary Ferranti's factory in Oldham, England, primarily against Elbit's production of various bombs and other military technology used by the Israeli air force and resulting in a significant number of Palestinian civilian casualties,^[35] and particularly citing Elbit's manufacture of the Hermes drone, which was implicated in the deaths of at least four Palestinian children.^[11] Elbit ended up selling its Ferranti UK subsidiary in 2022 for nine million pounds, approximately £6m less than it had purchased it for fifteen years prior.^[35]

During the 2021 Israel–Palestine crisis, on May 19, 2021, four members of Palestine Action dressed in red boiler suits and climbed onto the roof of an Elbit Systems-owned drone factory in Meridian Business Park, Leicester.^[76][77][78] The occupation lasted six days and a total of 10 arrests were made for conspiracy to commit criminal damage and aggravated trespass.^[76] The group has staged similar occupations of Elbit Systems sites in Bristol,^[79] Oldham in collaboration with Extinction Rebellion^[80][81][82] and Tamworth^[83] in collaboration with Animal Rebellion.^[84]

Beginning in October 2023, protesters again engaged in civil disobedience at multiple Elbit sites, responding to Israel's latest siege of Gaza. Activists disrupted operations Instro Precision Factory in Sandwich, Kent; UAV Tactical Systems and Howmet Fastening Systems in Leicester, all in the United Kingdom.^[85] In the United States, protesters also chained themselves to the entrance of Elbit's office in Cambridge, Massachusetts,^[86] and claimed to completely shut down the company's operations in another protest later the same month in an incident resulting in nine arrests.^[87] In a separate protest in November at an Elbit location in Merimack, New Hampshire, three protesters were arrested for vandalism.^[88] According to an NBC News report, the "Merrimack Fire Department was also called to the scene due to a report of smoke coming from the roof [..] at least one of the main lobby doors had been locked shut with a bicycle lock."^[89]

Products

Unmanned aerial vehicles

• Elbit Hermes 90
• Elbit Hermes 450
• Elbit Hermes 900
• Elbit Lanius
• Elbit Legion-X
• Elbit Skylark
• Silver Arrow Micro-V
• Silver Arrow Sniper

Unmanned surface vehicles

• Silver Marlin

Communication

• E-LynX

Guided mortars

• Iron Sting

See also

• Rafael Advanced Defense Systems
• Elta Systems
• Economy of Israel
• Science and technology in Israel

References

External links

• Elbit Systems Limited web site
• Elbit Systems of America web site
• Elbit Systems Pilot Training Center