Long before the October war exposed the vulnerability of Israel's vaunted defense machine, the state-owned, supersecret Israel Aircraft Industries Ltd., which builds and services planes for peace and war, was showing signs of strain. Its first two tries at building executive jets seemed to have flopped expensively, and its attempts to refurbish and resell old planes appeared to be sputtering. Shortly before the war, Moshe Dayan, then head of the Defense Ministry, tried to oust the company's boss, Al Schwimmer.
A plain-spoken former grease monkey and TWA flight engineer from Bridgeport, Conn.,...
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