Boeing Selects Elbit Training System for U.S. Navy

Jul. 3.08 | About: Elbit Systems (ESLT)

The Israeli business daily Globes is reporting that Boeing (NYSE:BA) has selected a training system made by the Israeli defense contractor Elbit Sysytems (NASDAQ:ESLT), to be used in U.S. Navy training.

According to Globes:

Boeing Co. has selected Elbit Systems Ltd. as the supplier for the US Navy’s T-45 Goshawk Virtual Mission Training System (VMTS)…..The T-45 will replace aging T-39s as a key element in the US Navy’s Undergraduate Military Flight Officer (UMFO) training modernization plan. The T-45 will provide realistic training at a lower cost in a fighter-like environment.

Elbit Systems has been an Israel Opportunity Investor [IOI] favorite for quite some time. The company has continued to sign deal after deal and has a pipeline of almost $5 billion. While the size of the deal wasn’t disclosed, this type of high profile deal is great not only for the company but for shareholders as well. While Elbit has done a phenomenal job of growing the business and creating profits for shareholders, the company continues to remain under the ‘radar screen’ of many investors. This type of high profile deal involving Boeing and the U.S. Navy is the kind of deal that can put the spotlight on the company, and create general knowledge to the greater investment community.

This deal could be problematic for those in Seattle (read our post on the issue) that are pushing the city to divest from Israel. Now, a hi-profile Seattle employer enters into a defense deal with an Israeli company, to help train US Navy fighters - it can’t get worse than that.

Disclosure: The author’s fund has a position in ESLT. He has no position in any other stock mentioned as of July 2, 2008.