Industrial parks are Stef Wertheimer’s weapon of choice in the fight to end conflict in the Middle East
Much has changed for Stef Wertheimer since Forbes last talked with the Israeli industrialist in 1995. For one, he’s become a billionaire. In 2006 Warren Buffett’s Berkshire Hathaway paid $4 billion in cash for 80 percent of Wertheimer’s precision metalworking tool company, ISCAR. To date it remains one of Berkshire’s five largest non-insurance-company holdings, and while its vital statistics are jealously guarded by the investment firm, in his latest letter to shareholders Buffett described ISCAR as a company that “continues to amaze.” ISCAR emerged with record profits in 2011 despite taking a huge hit on Tungaloy, the Japanese toolmaker acquired in 2008 and crippled in last year’s tsunami.
ISCAR was Berkshire Hathaway’s first major overseas acquisition, and the deal vaulted Wertheimer into the ranks of the global business elite. What Buffett was also buying into was a highly successful and unsung peacemaking effort.
Capitalism, the 82-year-old Wertheimer insists, is better equipped than politics and diplomacy to solve the conflict that has rocked Israel since its founding. If a primary source of tension between Arabs and Jews is economic disparity, he has the countermeasure: The humble industrial park.
Israeli Arab households make, on average, 58 percent of the income of their Jewish counterparts, says Shlomo Hasson of the University of Maryland.
Arab men make 69 percent of what Jewish men make, and the proportion of Arab women in the labour market is three times lower than that of Jewish women. Regionally the disparities are even more striking. Israel’s GDP per capita has grown to $31,000, while Lebanon’s sits at $15,600 and Jordan’s languishes at $5,900, according to the International Monetary Fund. In the Palestinian territories the figure is an astonishing $2,800, according to the World Factbook. Compare that to oil-rich nations—$103,000 for Qatar, $48,600 for the UAE—and the stereotyping problem emerges. “There are many who believe that the only thing in the Middle East is oil,” Wertheimer says. “And if you are not in on oil, then there is nothing for you. If you want to get people out of the frustration created by the culture of oil, the only way out is industry.”
Wertheimer had a stint in politics, serving in the Knesset from 1977 until 1981. His last year in politics was also the year he established Kfar Vradim, a residential community near Nahariya with cozy homes, a vigorous community activity schedule and walkable woodlands. Kfar Vradim was the honey he used to draw entrepreneurs for his next big expansion, the Tefen Industrial Park. The complex, built in 1985, is just a five-minute drive from Kfar Vradim and has a postal service, a shared dining hall, a museum of modern art, a collection of vintage cars and a tennis court. There is an alternative school that educates over 500 students of various ages on industry and creativity.
(This story appears in the 30 March, 2012 issue of Forbes India. To visit our Archives, click here.)