MANAGEMENT TAKEOVER ATTEMPTS

http://www.solhaam.org/articles/kibbut.html

Afikim, with 1,400 residents the second-largest kibbutz in Israel, has factories which are 'run on purely capitalistic lines by boards of directors, mostly outside experts appointed for their business or technical acumen.' {KIB 02}

Its industrial enterprises have been separated from the kibbutz community. Policy setting and management have been distanced from kibbutz members and it would appear that to this extent managers and directors have begun to take over control from kibbutz members.

Kibbutz members are at risk of losing control over their destiny as community-orientated decision-taking moves towards profit-maximising. And so one would like to know more about their policy setting processes, about how they hire and fire directors and managers, about how the pay of directors and managers compares with kibbutz members.


But Kfar Hanasi are now treating individual kibbutz operations as profit centres, looking at their profitability and costing labour. 'Contribution to profits' seems to be replacing 'service to community', motivation and commitment.


Borrowing had been cheap at the time kibbutzim were lent (received) donated funds from Jewish communities at next to zero interest rates compared with inflation. The prosperity of the kibbutzim had developed from the donated funds they had been lent (given) in the past. <8>

So when about ten years ago inflation in Israel reached over 200 per cent and exceeded interest rates then being charged, borrowing again seemed cheap. And kibbutzim took out large loans from banks.

But the banks were not giving money away as had the Jewish communities. Inflation dropped to 50 per cent and then to 20 per cent while interest rates stayed high at 60 per cent and then 40 per cent.

As a result many kibbutzim now have to repay what they borrowed, have to repay large debts and pay high interest charges to the banks.


In a deal completed with the government, the banks agreed to write off a quarter of the debts. The kibbutzim have to repay debts totalling something like GBP 1.5 billion. A condition is that 'kibbutzim will have to cut back on many of their non-profitable operations'. {KIB 01}

So it seems that these kibbutzim are expected to maximise profits (for the benefit of money lenders) at the expense of what may be more worth-while community-orientated activities.