Life & Culture

'We met. It was love at first sight'

When Eitan Wertheimer decided he wanted to sell ISCAR, there was only one person he wanted to buy it.


When Eitan Wertheimer decided he wanted to sell ISCAR, the metal-cutting tools manufacturer his father Stef founded in 1952, there was only one person he wanted to buy it –- billionaire American investor Warren Buffett. The boss of Berkshire Hathaway is regarded as one of the world's most accomplished businessmen. He is consistently ranked among the world's wealthiest people - third in the 2010 Forbes rich list, worth an estimated $47 billion.

Mr Wertheimer, 59, says: "I spent two years researching who would be the best person to buy the business and decided that Warren Buffett was the only one. If Warren had not wanted to buy ISCAR, then I don't think we would have sold it."

Undaunted by the fact that Berkshire Hathaway had never invested in a company outside of the US, in February 2006, the Israeli sent him an email. He says: "I don't remember exactly what I wrote. It was straightforward. I told him who we were, what we did and what we wanted, and stressed that like Berkshire Hathaway, we were a business based on family values."

He later got a call from Mr Buffett.

"He said he liked the fact that we were a market and a cost leader and would I be in Omaha any time soon. I said, jokingly, that as it happened we would be passing through next Monday morning. When we met it was love at first sight. He is fascinating. So modest and humble. He has a small office - if there are more than three people in a meeting you have to bring in more chairs."

‘Warren doesn’t look for troubled businesses, he looks for good ones’

Three months later, Berkshire Hathaway acquired 80 per cent of ISCAR for $4 billion with the Wertheimers retaining the 20 per cent balance. Eitan Wertheimer stayed on as chairman.

After the deal was signed, the New York Times noted: "Wertheimer and Buffett are both low-key and folksy and delegate responsibility to the point of abdication."

Mr Wertheimer quips: "For years my CEO at ISCAR Jacob Harpaz, would ask my opinion and I would say: 'Do whatever you like, it seems to be working'. Now Warren tells me exactly the same."

He spends a lot of time traveling with Mr Buffett promoting ISCAR - so much so that some people have started calling him 'Buffett's travel agent'.

"I was recently in China with Warren, and in March we will be in Korea, Japan and India."

What is Mr Buffett really like? A guru and a teacher. "I have always loved buying troubled companies and turning them around. Warren doesn't look for troubled businesses, he looks for good ones. Then he lets the people who know how to run them continue to do so."

Eitan Wertheimer is one of Stef Wertheimer's four children. Stef, considered to be one of Israel's richest entrepreneurs, was ten when his family reached Palestine from Germany in 1937.

He dropped out of school aged 16 and after being fired by the Rafael weapons development authority in 1952 because of his lack of formal education, he set up his own business. Eitan, by his own admission, was also not particularly academic, failing to get his matriculation certificate at secondary schol.

However, after successfully turning around several failing businesses, he was accepted on to a postgraduate course at Harvard Business School.

On setting up businesses that look for an early exit rather than building long term growth he says: "It's like the difference between sex and family. Of course one leads to the other and both are good but they are different commitments. One is a sprint and the other a marathon. Some products and businesses are only suitable for a sprint but the marathon is better, and I think some young Israeli entrepreneurs should consider alternatives, and might find the marathon more interesting."

ISCAR does not publish figures, but business information provider Dun & Bradstreet estimates that despite its biggest customers being financially-troubled carmakers, sales grew from $1.2 billion in 2008 to $1.4 billion in 2009.

The father-of-five says: "Our customers feel very comfortable now that we are part of Berkshire Hathaway."

While selling 80 per cent of ISCAR, the Wertheimers still retain control of their other businesses: Blades Technology, a partnership with Pratt & Whitney that makes 40 per cent of the compressor blades in the world's jets, and its subsidiary Techjet Aerofoils, a joint venture owned equally with Rolls Royce to produce aircraft rotor blades.

Mr Wertheimer devotes a lot of his time to charity, primarily through Atidim, which helps young put people from underprivileged Israeli communities into higher education. "We have helped 21,000 students through the Atidim program and 37 per cent of them went to the Technion, and 45 per cent to Ben Gurion University."

He has also set up funds for education in the Arab and Charedi sectors as well as a loan fund for small businesses in the Galilee and Negev.

"I have spoken to Warren a lot about philanthropy. He has wonderful ideas on the balance between your heart, your pocket and your mind, and how you put values and wealth together in a sensible way to make a better world."

The Wertheimers are also renowned for pioneering industrial parks in Israel's peripheral regions, such as Tefen in the Galilee where ISCAR is headquartered.

These sites are characterised by trim lawns and art sculptures rather than large factories. "Jewish mothers don't like the idea of their children working in factories which they see as dirty and messy places. So we have tried to create a cleaner environment."

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