Supply Line

Harold Kutner expects his summer Israel trip to
develop more Middle East purchases for
General Motors.

ALAN ABRAMS Special to the Jewish News
DANIEL LIPPITT Photograper

here is no question in
my mind that in the
next decade Israel will
be known as the tech-
nology leader of the world."
If that sounds like a leftover cam-
paign promise by Israel's Prime
Minister Binyamin Netanyahu, think
again.
The man who spoke those words is
Harold R. Kutner, General Motors
vice president in charge of worldwide
purchasing and North American oper-
ations (NAO) production control and
logistics. In simplistic terms, he's the
chief buyer for GM. And his words
carry global clout.
In July, Kutner, who is the highest-
ranking Jewish executive at GM, visit-
ed Israel where he met with GM sup-
pliers and politicians and, at the
request of Netanyahu, undertook a lit-
tle economic diplomacy mission in
Jordan.
GM spends $70 billion a year.
That's almost equivalent to the gross
domestic product of the nation of
Greece.
But only $25 million of that
amount is spent in Israel, and Kutner
and GM want to increase it. "If you
sell in a country, you should buy there
too," has become Kutner's motto.
There's a lot of 21st century tech-
nology in Israel, and GM wants to be
at the forefront of using it. So for
these two partners, it is a win-win sit-
uation.
Kutner's eight-day visit to Israel
along with local industrialist Joel
Tauber (whose Southfield-based Key
Plastics, Inc., is a GM supplier) and
Doug Bloom was made under the aus-
pices of Partnership 2000 of the

9/19
1997

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Jewish Federation of Metropolitan
Detroit.
This was the second visit to Israel
by the 57-year-old Kutner, who has
been responsible for GM's global pur-
chasing since 1994. His first visit, in
1981, was on a mission out of
Buffalo, N.Y.
Kutner was eager to visit Israel this
time because of GM's interest in mag-
nesium, which is being extracted from
the salty waters of the Dead Sea
(which contains some of the world's
highest percentages of magnesium
oxide). The worldwide demand for
magnesium far outstrips its limited
supply.
While in Israel, Kutner was told by
Natan Sharansky, minister of com-
merce and industry, that the Koreans
have invested $10 million in Israel's
Dead Sea Works. This comes on the
heels of the $350 million partnership
deal inked in 1996 by Volkswagen,
the world's fourth largest automaker,
and the same firm.
Although that agreement called for
a further $350 million investment to
establish a second phase of increased
production, executives of Dead Sea
Works in Beersheva told Kutner that
phase II is on hold until management
"fully understands the current market
expansion and what this will do to the
price of magnesium."
In a July 30 report on his trip,
Kutner told GM Board Chairman
John F. Smith, Jr., Vice Chairman
Harry J. Pearce (both of whom have
visited Israel), and other key GM
executives that Dead Sea Works execu-
tives advised him that Volkswagen is
their No. 1 supply priority, with
Israeli diecasters being second.

Kutner reported that although
a joint venture with the Dead Sea
Dead Sea Works considers VW a
Works with both countries sharing
junior partner, the German automak-
technology. "Obviously, that would
er's demand for control of the output
have improved the relationship
was not granted. Further, Dead Sea
between Jordan and Israel," said
Works is planning an integrated cast-
Kutner.
ing facility, "obviously at the direction
That may be fine for diplomacy,
of VW" He was also told the compa-
but not highly advantageous from a
ny wants to sell to their neighbors in
purchasing viewpoint. "I like competi-
Abu Dhabi and Bahrain.
tion," said Kutner.
Kutner was told that Dead Sea
Kutner said he found a very good
Works "would like to supply" the
relationship between the Israelis and
quantity of magnesium GM
the Jordanians. "A lot of the
requested, they "have other
Israeli industries are sending
priorities, and will not sell at a Opposite Page: product over to Jordan for
Harold
discount to the market," insist-
Kutner: GM's assembly," using the lower cost
ing instead upon selling at
business is the labor in Jordan.
"market price."
"If there's ever going to be
world.
When is the last time you
peace," he said, "it is going to
heard about a supplier kissing
come about because of an
off GM? This, combined with
interdependency on economics. It is
Netanyahu's request, prompted
not going to be because they like each
Kutner's meeting with a Jordanian
other."
magnesium-producing rival of the
Kutner had better news for his
Israeli firm.
employer when he visited Ortal
Kutner crossed the Allenby Bridge
Diecasting at Kibbutz Neve-ur, which
into Jordan to meet with Hani Mulki,
uses metal from the Dead Sea Works.
Jordan's minister of industry, trade
Kutner made a commitment to
and supply, and Ali Yousef Ensour,
Ortal to find them a Western partner
chairman of the Arab Potash Co. GM
for either a technology arrangement or
agreed to send a letter of intent to
equity investing to expand their capa-
develop business interests for the Arab
bility.
Potash Co., and stated their desire to
"What impressed me at the kibbutz
"take a percentage of capacity from
was the seven-day-a-week work atti-
magnesium production that the Arab
tude, and the desire to become a
Potash Co. could put into place."
major producer of the product. It is
Kutner and the Jordanians dis-
our intention to become a major
cussed which technology to use, with
buyer of the product," said Kutner.
the Jordanians favoring Russian.
Kutner also visited Elbit, which
Kutner said that is the technology
converts defense electronics into com-
Israel is also using, although they have
mercial uses. He is wondering if Elbit
improved upon it.
can apply its gun-sighting technology
At Netanyahu's request, Kutner
to automobiles, specifically to collision
encouraged the Jordanians to consider
avoidance systems.

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