The Stef Wertheimer formulae for Middle East regional stability where “the battlefield today should only be the market place”
By David E. Kaplan
Reading in the latest Forbes ranking industrialist Stef Wertheimer as Israel’s wealthiest citizen with a net worth of $6.2 billion in its annual ranking of the wealthiest billionaires in the world, reminded me of my interview with him in 2011.
It also made me think that Israel’s premier industrialist would not have been pleased with the nature of exposure!
Why do I assume this?
Well, before I even began that decade-old interview, Stef said:
“I hope you were not planning on asking me about the Buffett deal?”
I was taken back!
The “Buffett deal” of 2006 was not just any deal but the most highly publicised one at the time in Israel’s history. Yes, it was when Warren Buffett‘s investment company, Berkshire Hathaway Inc., acquired 80% of Wertheimer’s Iscar Metalworking Companies (IMC) for $4 billion. Not only was it a ‘big deal’ for Israel, but also for Buffett being his largest acquisition outside the USA! This was a huge endorsement of Israel, so yes, I had planned to anchor my article on ‘the Buffett deal’. I had also been spurred on by Buffett revealing shortly before our interview in 2010 that he he would like to invest more in Israel, believing that Israel has a sustainable advantage in the global competitive market place, saying:
“If you are looking for brains – stop in Israel.”
Puzzled, I asked Stef why he was so against discussing the deal, after all, “it made your family and your company household names – globally?”
His explanation was instructive.
“Why do you think that the Berkshire Hathaway deal is any more important than the first deal I did with my fledgling company operating out of my house in Nahariya in the early 1950s?”
Seeing my perplexed look, he continued:
“It you disregard the amounts of money in the equation and focus on impact then the first 1950s deal was far more historically significant than the Berkshire Hathaway deal.”
The message was clear. Beneath the veneer of being bedazzled by billions, Wertheimer was directing the interview to a far more philosophical rather than simple monetary assessment of the word “value”.
Stef Wertheimer was born in Kikenheim, Germany in 1926, the son of a musician and decorated war veteran of the Great War. In 1936, with the Nazis entrenched in power, the Wertheimer family fled Germany for Palestine. “I was 10 years old,” he said, “so they did not ask me.”
Following learning a trade as an apprentice to a refugee, Stef, at age eighteen, joined the newly established Israel Air force flight school. Although he graduated as a pilot, the army was far more interested in his skills in metal processing. Given the important task of developing weapons, no one in those days would have imagined that young Stef was well on his way to becoming a global industrialist and ‘warrior’ for peace.
When the State of Israel came into being and the battles ended, he started his cutting-tool factory from his home in Nahariya – then a small coastal town in northern Israel – with a borrowed lathe and a loan from a local butcher.
“Living in Nahariya, I used to ride my motorbike to kibbutz Hanita where I paid for the use of a machine. I then decided in 1952 to work at home and started with small blade sharpener which cost 40 lirot. My ‘factory floor’ was the balcony off our kitchen. I called my business Iscar and it was a case of family and factory sharing the same premises. As the business expanded and required more space, I invaded the bedroom and shifted the beds into the corridor. In between all this, Irit, my baby daughter was riding around on her tricycle taking bites of food from my workers. That is how she cultivated a liking for harif (hot) cuisine from my Mizrahi (Eastern Jews) workers.”
These were humble beginnings but the makings of what would amount global news in the future.
Battlefields for Peace
Known as the father of Israel’s “Industrial Parks”, establishing his first Tefen Industrial Park in 1982 in the northern Galilee – “to foster economic growth and job creation and so help create stability in the region” – it became the model for all the parks that followed. He became animated describing then his latest and sixth park, located in Nazareth that “will be managed by Arabs but essentially where Jews and Arabs will work together. It’s a model for coexistence, where people work with each rather than against each other. The battlefield today should only be the market place.”
This argument had added resonance at the time as the Middle East in 2011 was gripped in the turmoil of the Arab Spring that had begun in response of citizens across the Middle East rising up against their autocratic regimes for their low standards of living. This Wertheimer understood well and in a series of articles he penned at the time, was advocating a type of ‘Marshall Plan’ for the Middle East of mass industrialization as a tool for regional harmony. More than ideology or religion, they needed – JOBS and jobs in mass manufacturing
Explaining, he said, “if people are highly skilled, earning good salaries and enjoying job satisfaction, there will be less urge for individuals or nation states to resort to violence to achieve their aspirations. Religious fanatics only flourish where poverty and despair rule. But to achieve an industrial revolution, we need too, a revolution in our educational system to produce a skilled working workforce.”
A portend of things to come, our interview also took place a few months before the Social Justice protests across Israel, when starting in July 2011, hundreds of thousands of protestors from a variety of socio-economic and religious backgrounds opposed the continuing rise in the cost of living – particularly housing.
These were hardly the people with a mindset for factory floors but Wertheimer understood but pressed his case for a change in mindsets.
“Sure, we prefer to pursue the ‘clean’ professions because we are pressurized by our parents. This is embedded in our culture where we have an aversion to roll up our sleeves and getting our fingers dirty. For this reason, Jews gravitate to commerce and the professions rather than into industry. This needs to change.”
And to my next question of how we break from tradition if it’s so imbedded in our culture, Wertheimer replied:
“One need look no further for a shining example than one of our revered Zionist pioneers, A.D. Gordon. Was he suited to work in the fields? Definitely not. He was an elderly intellectual, of no great physical strength and with no experience doing manual labour, but he took up the hoe and worked in the fields. By personal example, he provided the inspiration for generations of Zionist pioneers to create a Jewish economy by physically working the land. By personal example, he showed how manual labour, so essential to the creation of the state, was honourable and enriching work.”
His argument was we need that same insight and spirit of A.D. Gordon to move new generations not to the fields but to factory floors. “In the same way that tilling the land in the early days was considered honourable, so today we need to correct the erroneous notion that manual labour is “low”. Nations with the most dynamic economies such as China, India, Singapore, Switzerland, Denmark and France have introduced a dual system of technical education that combines classroom learning with on-sight internships in various industries. We need to do the same.”
And as to what progress Wertheimer had made so far towards this goal, he explained:
“I have for over 50 years created and run technical education programmes. Along the way, I have established six technical schools, including one in the army and one in the navy. These are schools where young people can learn a trade and acquire skills of a very high standard. I have also established schools where we teach teachers in vocational training because this is so lacking in this country. I cannot stress enough – we have enough bankers and lawyers; we need people with skills and when they receive the recognition they deserve, attitudes will change. This is the way forward for Jews and Arabs to stand together. Their battlefield is the factory floor, their common enemy – their competitors in the overseas markets.”
Embellishing on his Marshall Plan for the Middle East that there cannot be real peace in the region unless neighbouring countries enjoy similar economic prosperity, he explained:
“If Israel has been a success story, we could be more of a success by helping our neighbours more than ourselves. They need to believe that they are on the same path to prosperity as us. We need to expend far more of our resources on peace rather than on war. Can you imagine if we built Industrial Parks like we have in Israel all over the Middle East, the impact it would have on regional peace and stability? People don’t know, but the money the government spends on ONE fighter plane could pay for FIVE industrial parks. Think of it – which offers a better return on the investment?”
Imagine if there were hundreds of these “Pockets of Peace” all over the Middle East? “Who would have the time or inclination for war? People would be too busy creating than destroying.”
This vision has been passed onto his son Eitan, today the CEO of Iscar.
“There are no bad people. There are just people without a future and people with a future. Once you create a future, peace will come. The model is already in place. It only needs to be adapted elsewhere – to build a region of conflict into islands of hope.”
“We need people like Stef, who live for their ideas and bring them alive through commitment and pragmatism,” expressed the German Federal Minister of the Interior, Wolfgang Schaeuble in 2008 on presenting the Buber-Rosenzweig Medal to Wertheimer for his contribution to Christian-Jewish understanding.
Possibly the accolade that best sums up Stef Wertheimer’s contribution to the State of Israel came from his good friend, Prime Minister Yitzhak Rabin who said, “Stef, hopefully, if there were more people like you, not many, maybe just 20, the country would be completely different.”
Laughing all the Way to the Bank
A few years after Israel’s War of Independence (1948-1949), Stef found himself sitting on a bus with a young woman he had met in their days in the Palmach, the pre-independence, elite fighting force.
“So Stef, what you doing with yourself now? Any plans?”
“Yes, to go into industry; I want to start my own business.”
“What?” she asked and laughed so loud everyone on the bus stared at them. After all, the country was poor; many foodstuffs were hard to come by.
However, six decades later, what began from a loan from a butcher and a borrowed lathe working in his backyard, grew into one of the world’s largest manufacturers of metal cutting tools, which are used by carmakers, shipbuilders and aerospace industries.
Who had the last laugh?
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