The Generals Mean Business

Rare is the book publisher who gets the opportunity that befell Uri Ben-Ari, general manager of Tel Aviv's Lewin-Epstein Co. When he was recalled to his other job as an armored-brigade commander two weeks before the 1967 war, he organized a team of photographers and journalists and readied them to cover the battlefronts. Six weeks after he led Israeli tanks into the Arab part of Jerusalem, he brought out Victory, the first book on the war. It sold 150,000 copies in Israel alone, and has since been translated into English, French, German and Spanish. Ben-Ari has gone on to publish a score of titles in the U.S., where his Sabra Books are distributed by Funk & Wagnalls.

Ben-Ari was among the first of a rapidly growing number of former professional officers who have become top civilian executives in Israel. Since the Six-Day War, nearly 100 former generals and colonels have taken command positions in private or government-owned industry, banking, utilities, commerce and transportation. Often, they are recruited to executive suites a year or more before they pick up their first pension check, and can choose among a dozen offers.

Frustrated Talent. The recruiting of the generals and colonels coincides with a basic change in the government's economic thinking. Israel's Zionist founders scorned commerce and were more interested in agriculture and socialist ideology than in industry. Thus the Jewish talent for business was late to bloom in Israel. Civilian managers often lacked the skills to run modern industrial corporations or to deal with foreign investors on anything like equal terms. Lately, the government has concluded that Israel's future security depends almost as much on a strong economy as on a tough army. Last year the gross national product increased 13%, to $4 billion, and overall investment shot up 44%. Suddenly, skilled managers were very much in demand to help guide that growth.

Ex-General Elad Pelled, an infantry division commander, is now deputy managing director of Israel Electric Corp., the government power monopoly; ex-Brigadier Dan Tolkowsky, a former air-force commander, is managing director of Discount Bank Investment Corporation Ltd.; Chaim Herzog, a former chief of military intelligence, manages Sir Isaac Wolfson's diverse interests in Israel.

One ex-colonel, Zalman Shalev, a former head of military communications, founded an electronics company that recorded $1,500,000 in sales last year. Another ex-colonel, Arieh Shachar, took over the money-losing government trucking company called Mifalei Tovala, promising to turn a profit within a year or close down the company. He replaced its ancient fleet of trucks and fired 70% of the headquarters staff, starting at the top "to show the workers that the reforms were just." Shachar also negotiated a new labor contract that increased the drivers' work hours by 15%, with no raise in pay; he accomplished that by holding out an offer of better pensions and threatening closure as an alternative. The first year's profit: $220,000.

Ex-General Meir Amit, onetime head of Israel's intelligence service, last year took charge of Koor Industries, which is owned by the giant labor federation, Histadrut, and accounts for one-fifth of Israel's industrial production, spanning into steel, cement, tires, electronics, chemicals and glass. He found that Koor was a "collection of little empires"; it had no fewer than 34 managers, who were often slow to exploit foreign technology. Amit consolidated five metal-working plants into a single division, merged two chemical plants, centralized headquarters functions and dropped unrewarding products. He also added a flat 10% to everyone's sales targets, and expects to double Koor's annual sales of $200 million by 1974.

Second Careers. It was quite natural that government-directed industries turned first to the army. Israel's military is a meritocracy of men who are accustomed to leadership, large-scale administration and organization and the uses of new technology. The first computer in Israel, for instance, was owned by the army. Top officers are unusually well-prepared to take up a second career, unlike their U.S. or British counterparts, who often wind up as mere corporate figureheads. The military policy of retirement at age 40 to 45 is designed to ensure both rapid promotion in the army and a cadre of experienced administrators in civilian life.

Often the army provides the best education that young Israelis can get. Israel Electric's Pelled, for example, was sent by the army to Paris' Ecole Superieure de Guerre, and then to Hebrew University of Jerusalem to study economics and political science. The present chief of staff, Chaim Bar-Lev, is a graduate of Columbia's School of Business Administration, as are a dozen other senior officers. Israel's ex-officers also enjoy the rare advantage of being genuine national heroes, and young Israelis relate to them far more than to civilians of the same generation. Their initial success guarantees that the country will rely more and more on the military to provide managers. To help supply some more of them, Tel Aviv University recently opened a graduate school of business administration. Its acting dean, Dr. Ze'ev Hirsch, is the first to admit that "the army is the best business school in the country."

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