12 MONTH CERTIFICATE Bridge Over Troubled Waters 5.75% INTEREST RATE 51870 Having led a remarkable post-socialist about-face, Koor Industries CEO Benjamin Gaon now faces the challenges of peace, globalization and de-monopol ization. A.P.Y./* 60 MONTH CERTIFICATE AMOTZ ASA EL SPECIAL TO THE JEWISH NEWS I 6*00% INTEREST RATE • 1 3% A.P.Y./* These are fixed rate certificates of deposit that are insured by Federal Deposit Insurance Corporation (FDIC). A minimum opening deposit and balance of $500.00 is required to obtain the stated Annual Percentage Yield. SZAIR" BANK EQUAL SING OPPORTU HOUNITY LENDER CALL (810)338-7700 or (810)352-7700 4.400 0kir FederC :lly I. :Lund ./ Main Office 2600 Telegraph Rd. Bloomfield Hills, MI 48302 *;,:*** Annual percentage yield when compounded quarterly. Rate is accurate as of 2/28/97. Penalty for early withdrawal from certificate accounts may be assessed. We Never Leave A Stone Unturned... Ci) Four-strand cultured pearl bracelet (4.5mm pearls) with multi-colored gemstone separators in 14K gold. Citrine, amethyst, blue topaz, peridot and rkodolite stones. LLJ Ci) LLJ 1-- 0 CC I- LL] UJ 1-- 6 4 30400 Telegraph Rd. Suite 134, Bingham Farms • 642-5575 4, *4, , - hough 53 years have elapsed since Israel's Koor Industries was estab- lished, much of the drama, angst and vision which accom- panied the company's inception have yet to abate. The difference is only that this former leader of Israel's defense- related efforts has transformed into a peace-era path breaker, and that the conglomerate, which un- til recently epitomized the demise of Israeli socialism, is now spear- heading a capitalist revolution. Established at the height of World War II by Solel Boneh — the Histadrut-owned company which at the time was busy build- ing for the British army every- thing from airports to military bases anywhere between Egypt and Iran — Koor was originally meant to build labor-intensive fac- tories for Palestine's newly ar- rived Jewish immigrants. In a society dominated by a so- cialist establishment, this meant improved access to funds, real es- tate and labor. The company lost no time cap- italizing on all these, and by the mid-1950s emerged as a major producer, exporter and employer in the Israeli economy. Fittingly, Koor's development in subse- quent decades reflected much of the trends that characterized Is- raeli history, for better and for worse. In the early 1950s, eager to di- versify and inspired by David Ben-Gurion's determination to develop a local arms industry, Koor set up telecom specialist Tel- rad and artillery supplier Soltam. Politically, these subsidiaries, along with Tadiran which was founded in the early 1960s, made a major contribution to the tech- nological edge which helped Is- rael win wars. Financially, these companies figured prominently in an export- oriented defense industry which by the 1980s would become Is- rael's major source of foreign cur- rency. However, during those lengthy decades — being owned by the Histadrut's Hevrat Haovdim — Koor was not expected to neces- sarily generate growth and prof- its. Rather, its major economic purpose was to provide jobs. And so, when Koor expanded into a wide range of completely unre- lated fields, from motoring and food to chemistry and retailing, it often lacked the comprehensive, strategic broad view with which to piece together its increasingly disjointed activities. And worst of all, Koor's losing subsidiaries would seldom — if ever — be faced with market ver- dicts of cost-cutting, consolidation or downright extinction, and in- stead could always count on be- ing bailed out by the holding company's profitable arms. In 1983, in fact, the company bought ailing tire producer Alliance after its creditors threatened to de- mand its liquidation. Moreover, Koor's mid- and top-level man- agement were often retired army generals, many of whom lacked the kind of business knowledge, knack and experience that were vital for the decent fulfillment of the positions they assumed. Ultimately these deformities had to result in an explosion, and when it came — in the second half of the 1980s — Koor's agony loomed ominously as the most compelling manifestation of the dead-end at,which socialist Israel had arrived. By 1988, with 32,000 employ- ees in 130 companies, Koor had at its disposal a mere four prof- it-making subsidiaries and an overall $369 million deficit. Israel's economic leadership, encouraged by the success of the 1985 austerity program — which cut subsidies, stabilized the shekel, slashed the budget, trimmed wages and froze hiring across the public sector — brave- ly decided to leave Koor to its own devices, and thus sent a re- sounding message that the anti- economic days of knee-jerk bailouts were over. The man who found himself in the eye of this storm was Ben- jamin D. Gaon, whose leadership until then of the Co-Op retail chain was among Koor's handful of profitable activities. As Koor's new leader, Mr. Gaon oversaw a major debt restructuring plan, which he designed with the help of then-finance minister Yitzhak Moda'i. The major problem was cash flow. Clearly, the company could not repeat its 1986 exercise in fu- tility, when it raised $105 million by selling bonds on Wall Street through the dubious auspices of c' N