At age 77, industrialist Stef Wertheimer is setting out to the Middle East Marshall Plan that he has designed, initiated, and, to a large extent, financed. Wertheimer still works all day, because “there’s still so much left to do.”
”Globes”: How would you explain your project to someone who’s never heard of it?
Wertheimer: ”My Marshall Plan is based on aid from Western countries for strengthening the Middle East, in order to achieve peace and tranquility. The region will be strengthened by establishing 100 industrial parks on the Tefen model. The parks will serve as a five-year incubator for manufacturing and export companies. If aid is obtained, the parks can usher in an era in which production, exports, education, and an advanced quality of life can replace terrorism and poverty. The Tefen model, on which the parks will be based, combines a residential village with an industrial park.”
Wertheimer presented his plan to the US House of Representatives Committee on International Relations in July 2002. Former Senate Majority Leader George Mitchell has become its leading exponent on Capitol Hill. Those promoting the plan include former Secretary of Defense William Cohen, former House Appropriations Committee chairperson Robert Livingstone, and Lynn Holstein, who manages Wertheimer’s overseas affairs.
Do you believe that implementing the plan will bring peace?
”We’re talking about peace and stability. The Jewish communities in the territories and the people who live there are not the problem, nor are the Israelis and the Palestinians. The problem is creating jobs and wages. The next war will be industry fighting for markets, not Jews against Arabs. Ordinary wars are a thing of the past, and those still taking place are merely a residue of the past. People once thought that power could solve problems. They now understand the limitations of power.”
You have had this vision for several years already, and you presented it to the House of Representatives Committee on International Relations. Are you close to implementing your plan?
”I proposed an industrial village in Rafiah five years ago. The Israelis approved it, the Palestinians approved it, and the US welcomed it, but then the intifada began, and it didn’t work, so I tried an indirect approach. I concluded that Turkey and Jordan were important for my idea. They have a Western character, and need industry, and Turkey wants to join the European Union, for which it has to increase its per capita GDP.
”I visited the US Congress 18 months ago. I told them that I couldn’t carry out the idea by myself, and that they should help, but then the crisis with Iraq began. Meanwhile, we inaugurated the park in Turkey, and two more are on the way there. At the same time, I met with the King of Jordan, who recommended a project like this in Aqaba. I’ve already obtained approval for a 50-50 project there with a Jordanian partner.
”At this point, however, I want to pay more attention to Israeli Arabs. I started planning an industrial park in Arab Nazareth, where we’re giving courses for Arab and Jewish entrepreneurs. Since it’s impossible to do everything at once, I decided to focus on these cooperative efforts. In the future, we’ll institute cooperation with Egypt.”
Your people call it an economic road map.
”That’s right. The diplomatic road map isn’t worth, much unless jobs are created on both sides.”
Not making money
According to TheMarker.com, Shari Arison’s departure for Miami made Wertheimer the wealthiest man in Israel. He’s also the wealthiest self-made man, having begun as a machine tool producer in a shack in Nahariya in 1952. TheMarker.com estimates the personal fortune of Wertheimer and his son, Eitan Wertheimer, the owners of Iscar and Blades Technology, at $2.5-3 billion.
As the wealthiest owner of a private manufacturing company, Wertheimer has kept out of the public eye. He finds any attempt to include him in any club not dealing with industry, work, exports, and manufacturing repulsive. Attempts to direct the conversation to his wealth are answered with non-cooperation, dismissal, and hostile refusal. He says he hates talking about money, saying he’s “in the vision and industry department. I don’t work for money; I work for the creativity of it, and that’s what I get out of it.”
Why are you so secretive? Why don’t you cite the wealth and profits that you’ve made as proof that your methods are successful?
”All of that’s true, but I’m concerned about my privacy. Maybe it’s because I started as a tool cutter, who was proud of being a tool cutter. I’m also proud now that I’m a manufacturer and exporter, and I’m proud of the vision. I don’t want to talk about money.”
Wertheimer wrote his book, “The Tefen Model; Through Industrial Parks to an Economic Vision”, in the past year, as a summation of his business path and his plan for the Middle East. In it, he explains his avoidance of the mention of his wealth by saying, “I don’t make money; I make products.”
Before a conference scheduled in Israel for this Thursday, Wertheimer also agreed to be interviewed together with Jordanian Minister of Planning Bassam Awadallah, who is close to the King of Jordan, and has the authority to decide on investments for the Jordanian government; Turkish Economy Minister Ali Babacan; Ministry of Industry, Trade, and Labor Ehud Olmert; and Americans helping him to promote his plan to develop industrial parks as a means of achieving regional stability.
Wertheimer’s guests will board several railway cars provided by Israel Railways at the Savidor railway station, travel to Haifa, and from there to the Tefen industrial park. Wertheimer will give them copies of his book as a gift.
Industry as a basis for co-existence
Will you manage to convince all of them to support your vision?
”Those who are coming are already convinced. I believe that my model, four industrial parks in Israel, which have spawned 162 enterprises to date, projected to increase to 250 by 2010, can change the entire region.”
Wertheimer calls this combination a “capitalistic kibbutz (collective settlement)” a business and social concept, which provides education and an advanced quality of life, together with liberalism and private initiative. “The idea of industrial parks in the Middle East and on the borders between Israel and its neighbors is that the parks will bring industry and provide jobs, which will keep people busy working, instead of engaging in terrorism.
Wertheimer makes a number of factual assertions in his book. He says that the industrial parks account for a higher proportion of exports than the average in Israel. $500 million, 88% of the sales in 2003 by enterprises in the industrial parks, were exports, compared with 37% for all of Israeli industry. Per worker sales in the industrial parks average $155,000, compared with $147,000 in Israel, $160,000 in Europe, and $200,000 in Iscar.
What advantages do industrial parks have over other industrial activity?
”In industrial parks, companies are part of an incubator. They receive guidance, counseling, and secretarial services. They have less bureaucracy to handle. We give them centralized services, we invest in them, and we nurture them. My staff and I are involved in the business of the companies at Tefen, and provide helpful guidance. They can operate and export like medium-sized companies, despite their miniscule size. Companies get services free or at reduced prices for five years. After they grow, they leave the park for independent activity.”
Why do you give them cheap services. Is the project profitable?
”The project is not intended to make a profit; it is an investment. It’s like raising children, like investing in education. You don’t expect to make a profit from that. When they grow up and leave, bring foreign currency into Israel, and pay taxes, it will be worthwhile.”
On what is the Tefen model based?
”The Tefen model shows that the main thing isn’t real estate or construction investment; it’s a model that offer synergy between the following five factors:
- ”Education through entrepreneurial and creativity courses for industry and management. Tefen also has a national school that includes industry in its courses.
- ”Art Tefen and the other parks have sculpture gardens and museums to display the beauty of industry. The dining room and lobby at Iscar are decorated with paintings by Uri Lifshitz and other artists.
- ”Industry for export
- ”Coexistence the industrial park in Arab Nazareth is a good example of coexistence. When people work together, they have no time for nonsense. They’re too tired at night to commit terrorist acts. They’re satisfied, they engage in producing. They work together, not against each other.
- ”An advanced quality of life Kfar Vradim was planned as a village near the plant, rather than in the reverse order. People must be given work to live at a fitting level. Why was the Tel Hai industrial village founded at Tel Hai? Because it’s near Kfar Giladi, which is a good place to live.”
The museums in the Tefen and Tel Hai industrial parks display some of Eitan Wertheimer’s collection of 60 rare antique cars, which is the largest in Israel, and one of the largest in the world.
Next objective a park in Aqaba
How many industrial parks do you run now, and what are you planning in the near future?
”We operate four industrial parks, with two more under construction, in Arab Nazareth and in Dalton, on the Lebanese border. Tefen, which was founded in 1985, is the oldest, after the nearby village of Kfar Vradim was founded in 1981. It was followed by the Tel Hai, Omer, and Lavon (near Tefen, overlooking Karmiel) industrial parks.
”We recently inaugurated an industrial park in Gebze, Turkey, which will be officially opened next year. The park is a 50-50 partnership between local entrepreneurs and me. The next target is an industrial park in Aqaba, Jordan, on the border with Eilat, based on the Erez industrial zone. The governor of Aqaba is one of the people coming to the conference this week.”
How much does it cost to set up an industrial park?
”Setting it up costs $10 million, largely in education and technological training.”
In that case, 100 industrial parks will cost $1 billion. Is that the figure you quoted in the US?
”The amount of aid is unimportant. Initially, even $10-20 million would be good. What’s important is their commitment to the idea. That requires neither weapons nor money. It means jobs, which in the long term will enable people to earn money.”
Published by Globes [online] - www.globes.co.il - on January 5, 2004