Not surprisingly, Karniel recounted, “the income tax authority remembered the creative, brilliant solution [eight years later], but to their misfortune, the statute of limitations had expired.” As a result, their petition was dismissed by the court. However, according to the unequivocal interpretation of the attorney-general, even if the tax authorities’ petition had been heard in court, it would undoubtedly have been rejected for substantive reasons as well. It was simply a brilliant maneuver.
“It is no wonder,” Karniel says, “that the merger is still studied today in business schools.”
•••
The merger with Teva was a dramatic milestone in Assia’s transformation from a small company into the largest pharmaceutical corporation in Israel. Joint ownership of the new entity remained in the hands of the three families, although each family now held a smaller share than it had in the past. If prior to the merger the three families together had owned an absolute majority (50.1%) of Assia-Zori, each was now a private owner of 11.3% of the total shares. Some family heads complained that they had lost control of the company and therefore initially opposed the merger. But, as pointed out by Eli and his young team, each share of their smaller portion of the company was now worth much more than it had been in the past.
Around this time, Haim Salomon’s two partners in the establishment of Assia took their leave from the management of the company. Yitzhak Levin, chairman of the board of directors, passed away in 1975, a year before Yitzhak Elstein, who was still a member of the board of directors, celebrated his ninetieth birthday. Nachman Salomon, the company’s CEO and most influential figure, regarded Eli as his natural heir. Nachman decided to retire gradually, though some corporate officers pressured him to do so as soon as possible, partly due to his marked differences of opinion with Eli. Nachman tended to vigilantly safeguard the status quo and was exceedingly cautious in all the decisions he made.
One story that was repeatedly recounted throughout the ranks at Assia reflected not only Nachman’s distinctly conservative outlook, but also his warm human approach to his employees. One day, Gabi Polack and Aharon Schwartz, the company’s most senior corporate officers, came to Nachman’s office to voice their misgivings regarding production and to make a recommendation. Almost ceremonially, the elderly Salomon took out the three sandwiches his wife had made him for lunch, cut one in half, and gave one half to Polack and the other to Schwartz.
“Wait with the five tons,” he then told them. “First produce three tons, O.K.? Then three-and-a-half tons and then maybe we’ll get to four tons. Why do we need to make plans? We need to work. Go to work.”
Eli’s approach to business was almost the polar opposite. As long as Assia was a relatively small company, it could continue operating according to both approaches. But as the years passed, the underlying tension between the two became a burden. Although they both served on the board of directors and enjoyed an excellent personal relationship, it soon became evident that the group would not be able to maintain both courses over time and would be forced to make a choice. As most of the corporate officers supported Eli, it was expected that Nachman would soon vacate his position.
But as Nachman’s designated heir, Eli was in no hurry. He waited patiently for his father-in-law to act on his own initiative. Eli’s patience stemmed from an underlying sense of respect, a desire to avoid hurting Nachman’s feelings, and his aspiration to serve as the CEO of the group as a whole, after its consolidation into one integrated company. Nachman eventually retired and moved back to Jerusalem’s Rehavia neighborhood to live out the last years of his life. Upon retiring, he was appointed chairman of Teva’s corporate management. Nachman’s brother, Yaakov, who had played an important role in Assia during the 1960s and who some thought would ultimately inherit Nachman’s position, decided to focus on his legal practice and lower his profile within the group. He subsequently emerged as one of Israel’s most prominent attorneys.
Although Moshe Shamir, the Elstein family’s representative, was appointed to a key position in Assia and then Teva, he also accepted Eli’s seniority. From the perspective of his associates at Teva, his 1969 appointment as vice president of Vishay Intertechnology, the world’s largest manufacturer of electronic components, and as the chairman of Vishay Israel may have been an indication of this fact. He continued to hold various positions within Teva throughout the 1970s and 1980s, serving as a member of the board of directors and as chairman of the board, but always remained in Eli’s shadow.
That said, the founders’ descendants had representatives among Assia’s corporate officers: Yoel Moshe Elstein was the director and secretary of Assia and Zori and a member of the boards of directors of both. Attorney Avraham Levin served as chairman of the board of directors for many years. Still, the descendants of the three families appeared to have no doubt that Eli would be the company’s next CEO. As far as they were concerned, he represented not only the Salomon family but the Elsteins and the Levins as well.
At a meeting held shortly before the merger in May 1976, Teva’s board of directors selected 44-year-old Eli Hurvitz to serve as the company’s next CEO. It was perhaps only natural that he be elected unanimously. After all, he had earned the full confidence and respect of the 19 members of the corporate management, who clearly recognized the abilities, talents, and qualities of the man that had made Assia, Zori, and Teva such great successes.
•••
One of the distinct indications of Eli’s seniority at Teva was the fact that, even before becoming CEO, he began appointing several senior directors. Over time, they crystalized into a loyal team with exceptional practical and theoretical abilities. At the same time, he maintained good relations with a number of senior corporate officials whom he trusted. For example, in addition to Gabi Polack and Shmuel Zigelman, whom he valued greatly, Eli also had great respect for and a close working relationship with Dan Susskind. Eli had “stolen” Susskind from International Consultants and, in 1977, appointed him Teva’s chief financial officer. Another example was Uzi Karniel, who was appointed Teva’s chief legal officer in 1971. The notable characteristics that most of these people were their professional expertise and personal loyalty to Teva and Eli. Many worked alongside him for decades.
•••
Recognition of Eli’s executive prowess was not limited to Assia and Teva. In 1973, Eli was appointed CEO of the Israel Export and International Cooperation Institute (I.E.I.C.I.), which the Israeli government and members of the private sector established in 1958 as a nonprofit organization dedicated primarily to promoting the interests of exporters. In this capacity, Eli sought to advance industrial exports and the export of services as well as help establish trade relations, joint initiatives, and strategic partnerships with companies from abroad.
During his three years at the helm of the I.E.I.C.I., he sought to expand the services provided to thousands of exporters and business people in Israel; to promote exports through international initiatives and programs in different countries, assisted by Israeli commercial and economic attachés and proponents of local business development; and to maintain working relationships with diplomatic representatives, foreign commercial attachés in Israel, and international trade organizations around the world. He also took steps that benefited information and consulting services, helped forge wide-ranging networks for the promotion of Israeli exports, and provided auxiliary services for the international business community. He also initiated visits by Israeli business delegations abroad and international business delegations to Israel and the establishment of Israeli information pavilions at international trade fairs and exhibitions around the world to display Israel’s capabilities in a variety of fields.
The recognition of the business community heightened the appreciation for him within Assia. Eli commented, “To be somebody in Assia takes time, but when you become somebody in the Export Institute, people in Assia regard that as proof that you are somebody.”
Eli’s success at Assia, Teva, and the Export Institute increased awareness of his abilities outside the pharmaceutical industry. He was asked to serve on the board of directors of major Israeli companies, such as Bank Leumi. In 1976, as mentioned above, his peers in the industrial sector awarded him the Industry Prize. That same year, Zalman Susayeff, president of Israel’s Council of Industrialists, tapped him to serve on the Industrial Forum, whose goal was to plan future industrial development in Israel. Eli’s selection to join the forum as the representative of the Israeli pharmaceutical industry, alongside senior industrialists such as Uzia Galil, who was the CEO of Elron Electronic Industries Inc., and Avraham Kalir, of the Argaman textile factory, was indicative of his new status as a senior Israeli industrialist.
Even the press began to praise his work. On July 25, 1976, a profile piece by senior Ha’aretz economic correspondent Yair Kotler in the daily Israeli newspaper’s weekly supplement proclaimed, “Eli Hurvitz’s path in managing the pharmaceutical empire in Israel, and the labor relations they entail, has been a success story in which a combination of talent, ambition, perseverance, and long-term vision has resulted in a successful enterprise that contributes substantially to exports.”
Chapter 10
Eli’s Force
Eli’s appointment as CEO of Teva Pharmaceutical Industries was widely accepted as natural. He had already been performing this role for several years and he now received official recognition of this. The three families that had founded Assia regarded Eli as the right man for the job, as did Teva’s corporate management and employees. The media had already been referring to Eli as the CEO of Assia and the CEO of Teva for a number .of years and no one bothered correcting the error. Although Nachman Salomon held this title until Eli’s appointment, it was clear that Eli had been filling the position in practice.
Eli’s daily routine changed considerably after his appointment. Though he carried the full weight of managing Teva, he tried not to let this interfere with his role as husband and father. He did his utmost to be home for dinner with his family every day. When he was invited to business dinners or had social obligations in the evening, he would first have dinner at home. He never missed family meals on Friday evenings, holiday celebrations, or family vacations, which offered him regular opportunities to see, hear, hug, and express his love for his wife and children.
As his children grew older, they began to seek out their own paths in life. His eldest daughter Vered graduated from high school, completed her military service, and married Sariel in 1975. Meanwhile, Chaim started high school. Only Dafna, who was born just one decade earlier in 1965, served as a reminder to Eli and Dalia that they were still a relatively young couple.
The Hurvitz family had gradually become affluent, a change which was reflected in the homes they inhabited over the years. They started out in a small rented apartment on Chen Boulevard in Tel Aviv. Then they moved to a larger apartment in Ramat Gan, which was followed by an apartment in the Neve Avivim neighborhood, in north Tel Aviv. They finally purchased a spacious apartment of their own in Ramat Hasharon. Their wealth, however, appeared neither to dazzle them nor substantially change their lifestyle. Dalia worked in schools and later for Israeli Educational Television. Eli maintained a simple, modest lifestyle. He enjoyed his friendships with his childhood companions, the guys from the army, and other friends he made along the way. That was enough for him. He did not seek out the companionship of the rich and famous. In fact, it was typically the other way around. When he did socialize with well-known figures, it was typically at work-related functions, not at his own private events with Dalia and the family.
•••
Another manifestation of Eli’s simple, modest way of life was his service in the IDF reserves. While serving as the CEO of Teva Jerusalem, as the senior corporate official at Assia, and later as the CEO of the entire company, he could have easily gained an exemption from performing reserve duty, which usually consumed more than one month each year. Most of his colleagues took advantage of their professional status to do so, but Eli continued to serve. Moreover, when he was performing reserve duty, he would give up the weekend leave that soldiers generally received and instead request two-day leaves of absence midweek so he could visit his office at Teva and fulfill his duties as CEO. His extensive civilian responsibilities did not prevent Eli from rising in the ranks of the army. He completed a two-month training course for battalion commanders at the IDF’s armored corps training base and was promoted to the rank of lieutenant-colonel in the spring of 1976, around the time he was named CEO.
Eli did not view performing reserve duty as an impediment to his everyday life. On the contrary, he regarded it as a positive, ongoing experience that was extremely important to him on a personal level. His love for the IDF remained strong over the years. For Eli, like many other reservists, the military was more than simply a duty he was obligated to fulfill; it was a challenge, a unique meeting place for Israeli men that was completely different from his natural surroundings at home and at work.
As mentioned earlier, after serving during Israel’s War of Independence, Eli was discharged with the rank of private along with his classmates so they could finish high school. The time he spent at Tel Katzir was considered reserve duty and during it he underwent weapons training, attended additional training courses, and took part in small IDF operations initiated near the kibbutz. When he left Tel Katzir, he began receiving summons for regular reserve duty. He was also called upon to complete a three-month training course to become an officer. The IDF General Staff had come to the conclusion that in future wars it would have to rely primarily on reservists and therefore sought to train noncommissioned officers as well as officers in the various corps of the army.
Eli was pleased to have been selected for officers’ training, which was voluntary. Nonetheless, he asked his commanders to delay it until he graduated from university since work and his studies left him with little free time. After completing his academic studies early in the summer of 1956, he went to the training course for officers. Since his personal IDF file classified him as someone who excelled at mathematics, apparently due to the grades he received in high school and university, he was trained to operate a mortar, which requires an understanding of trigonometry. Next, he was transferred to Training Base 9 to serve as an artillery gunner. Later, he attended the officers’ course at Training Base 1 and ultimately became an artillery officer.
In 1956, before he received his lieutenant’s insignia, he found himself fighting in the Sinai Campaign as the commander of a heavy mortars unit. At the time, he did not know a great deal about the weapon itself, but was nonetheless assigned to command a unit responsible for firing it.
“I taught the officers serving with me the meaning of ‘calculated fire’ [calculation of the shell’s trajectory from the cannon from which it was fired to the target],” Eli recalled, “and they taught me about mortars – where you load the shell, how to operate it, how to shoot, etc.”
The IDF conquered the Sinai Peninsula from Egypt in just a few days in 1956. Eli was attached to a battalion fighting in the Abu-Ageila region. When the war ended, Eli, like most other Israeli soldiers and civilians, was gratified by Israel’s “crushing” victory, as it was characterized in the press at the time, and was disappointed by Prime Minister David Ben-Gurion’s dramatic decision to fully withdraw from the peninsula in light of the ultimatum posed by US President Dwight Eisenhower and Soviet President Andrei Gromyko. Only with the passage of time did he come to understand that the war had not been simply the struggle of a country fighting for its survival against foreign enemies but a war waged in the long shadow of Britain and France’s desire for control of the Suez Canal. In this light, he ultimately praised Ben-Gurion’s wisdom and courage in immediately withdrawing from the peninsula.
Over the next 11 years, Eli continued to serve in the IDF reserves, was promoted to the rank of captain, and was
assigned his own unit to command. He spent most of his reserve duty with his men, serving for three weeks or more at a time in outposts along the country’s borders.
When not engaged in their routine tasks, Eli and his men talked late into the night, while playing ball, cards, and what was once the most popular pastime of Israeli reservists: backgammon. At other times, they were busy training to operate heavy weaponry, preparing for the day when they would be issued an order to use it.
•••
That day arrived in June1967. The outbreak of the Six Day War on June 5, 1967, found Eli in Ethiopia on business. He was assessing Assia’s performance in the country. Although he was not obligated to return to Israel when he heard the news, he was nonetheless intent on doing so immediately. From his perspective, taking part in the fighting was a necessity. For this reason, he sought to return to Israel even before the outbreak of war, during the tense period before it. Eventually, after a few days fraught with difficulty, he arrived in Israel. After landing, he immediately travelled south to join his reserve unit, which was then engaged in fortifying Kibbutz Beror Hayil in the northern Negev. The soldiers were waiting impatiently for their orders to begin advancing toward the Egyptians.
Eli and the group of soldiers with him were thrown into the war in its first hours.
“I have no special stories from the Six Day War except mishaps…” Eli recalled.
First of all, the first shell was always fired at the wrong location. That’s a disaster. And the first shell we fired during the war fell near the [Shafi] hospital in Gaza, of all places. Of course, the first thing I did as we were still charging down the streets of the city was to leave the line for a moment and assess where the shell landed. I was pleased when I saw that it landed on a row of cars parked behind the hospital and not on the patients themselves. That calmed me down…
Eli Hurvitz and the creation of Teva Pharmaceuticals: An Israeli Biography Page 18
