jerusalem | Israeli industrialist Stef Wertheimer couldn’t even afford a lathe when he started his cutting tools company in a backyard shed.
But over the weekend, legendary U.S. investor Warren Buffett added Wertheimer’s Iscar Metalworking Co. to his fat portfolio, sight unseen, paying $4 billion for an 80 percent stake.
The deal was the talk of the nation in Israel on Sunday, May 7, with media devoting far more attention to the colossal sale than to the evacuation of Jewish squatters in the volatile West Bank city of Hebron.
The investment was Buffett’s biggest outside the United States, and Israeli Prime Minister Ehud Olmert predicted it would focus international investors’ attention on a country known primarily for its wars.
“This is the greatest investor on the face of the earth,” Olmert said of Buffett. “He is not Jewish, he is not a Zionist. He is only saying that he supports the Israeli economy and sees in it what we, even in our dreams, hesitate to say.”
The Tel Aviv Stock Exchange soared on the news, with blue chip stocks rising 2.7 percent to a record high on the day the deal was announced.
Buffett made a second purchase this week, buying a 60 percent interest in Israel’s Agrologic, which designs and manufactures systems for agricultural use.
For Wertheimer, who fled Nazi Germany at age 10, a strong industrial base is part of his vision of building a Jewish state.
“What is really important is to rebuild Israel,” the 79-year-old industrialist wrote in a column in the Yediot Achronot newspaper.
Buffett’s investment, he said, “put the country on the map as an investment target, bringing with him new markets and clients, who will ensure the continued growth of the entire region.”
Wertheimer is a self-taught man whose formal education, he says, ended at 14 after he was expelled for slugging a teacher who harassed a female classmate.
From that point on, he started developing the skills he later used in industry, working as an apprentice in an optical shop and a camera repair shop, repairing bomb sights for the Royal Air Force during World War II, and later, in Israel’s pre-state underground, making precision tools to manufacture guns and bombs.
In 1952, in the early days of the Jewish state, he found himself without a job, so he went into business for himself, founding Iscar with a grinding machine that wasn’t top of the line even then.
Located in the hills of Israel’s northern Galilee region, Iscar is far from the world’s manufacturing and commercial hubs.
It’s also far from local power centers in Tel Aviv and Jerusalem — something that suits Wertheimer, who disdains talk of stock prices and prefers action to words. He bowed out of politics after just four years in parliament, despairing of getting government to promote industry.
His frustration launched a crusade to do what government wouldn’t. He set up four industrial parks in Israel’s underdeveloped Galilee and southern Negev regions, nurturing more than 150 export-oriented businesses.
In recent years, as his son, Eitan, took over the company’s operations (and clinched the deal with Buffett), Stef Wertheimer has tried to take the lessons learned from developing a global business in a strife-torn industrial backwater to create a springboard for Mideast peace.
Industry, he believes, would create jobs and foster political, social and economic stability, diminishing the attraction of terrorism and providing improved trade opportunities for the West. But the realities haven’t always played into that scenario.
Wertheimer tried to set up twin Palestinian and Israeli business parks in late 2000, with a cafe in the middle. But shortly before the groundbreaking, the Palestinian uprising against Israel broke out, and the parks were shelved.
He later switched his sights to Turkey, where he is involved in a high-tech industrial park outside Istanbul. But an industrial park planned for Aqaba, a southern Jordanian port, never took off because authorities feared backlash from the predominantly Palestinian population. But he remains undeterred.
“I plan to invest all of my energies in establishing additional industrial parks in Israel, Turkey and other neighboring countries, so we can end the conflict in this region,” he wrote in his column.