Jan. 23 (Bloomberg) -- As chairwoman and former chief executive officer of Plasson Ltd., Tova Posner Henkin has led a double life. Over the past three decades, she has traveled the world, devoting 15-hour days to help the global producer of industrial plastic parts triple its sales and quadruple its market capitalization since a 1996 listing in Tel Aviv.
Back home, she rides her bicycle to Plasson headquarters. When her dirty clothing piles up, she hauls her basket a few blocks to a community laundry. And she takes home less than $20,000 a year, exactly the salary of a cashier at the cafeteria where she lines up for meals.
Posner is a member of Ma’agan Michael, Israel’s largest kibbutz and among the last holdouts of a utopian movement that once included more than 250 communities. Ballooning debt and waning ideological fervor have forced about 80 percent of kibbutzim to sell assets and scrap their egalitarian lifestyle.
But like a handful of other kibbutzim, Ma’agan Michael – “Michael’s Anchorage” in Hebrew, for its seaside location an hour’s drive north of Tel Aviv – has been able to stick to a socialist model largely because corporate profits have let members maintain the communitarian ideal.
“To be socialistically successful as a community you actually need to be capitalistically successful in the outside world,” said member Micha Balf, dressed in shorts and a t-shirt in the trailer-turned-office where he directs the kibbutz’s education programs.
Now, some of the kibbutz’s 794 members are calling for change, prompting fears that Ma’agan Michael may abandon its socialistic ethos. Following two years of study groups and late-night meetings, about three dozen kibbutz veterans have issued a 23-page proposal that, among other modifications, would alter the model that gives everyone the same salary no matter where or how much they work.
“We don’t want to be caught having a sumptuous meal on the deck of the Titanic,” said Balf, 58, a supporter of the changes who moved to Israel from the U.S. in the 1970’s.
As most middle class Israelis struggle with soaring prices for everything from rent to rice, young couples at Ma’agan Michael automatically get a job and a home just a short walk down a palm-lined path to the beach. As a result, the vast majority of its young people stay, a reversal from the 1980’s when most kibbutzim saw membership plummet as the young fled.
Today, Ma’agan Michael’s population is rising faster than it can build homes, and the growth--in a place where the average family has three or four children--is eroding the sense of community, some members say. To encourage people to remain based on their love for the kibbutz rather than financial reasons, one proposal seeks to boost the exit grant for young adults who forego membership from $17,000 to about $60,000.
“Increasingly, we have newcomers who marry into the kibbutz and their kids aren’t being instilled with any sense of the shared mission,” member Mike Schlesinger says, raising his voice to be heard over the barista steaming milk at the kibbutz café.
The authors of the proposal say they are seeking baby steps to help maintain their socialist system and avoid a collapse in the event Plasson should run into financial trouble and no longer pay the dividends that account for almost three-fifths of Ma’agan Michael’s revenue.
“People are nervous about change because they think it could be a slippery slope toward privatization and the end of our lifestyle,” says Orly Ram, one of the kibbutz’s two secretaries, a title roughly akin to general manager, who has helped spearhead the proposals. “They should be scared not of embracing change but of remaining static.”
When the kibbutz was founded in 1949, members shared the utopian values of working the land for a common purpose. They at first focused on fishing and farming, and as was common throughout the kibbutz movement, members shared everything from food to socks and underwear and sometimes even partners. Until the 1980’s, children slept in the “Beit Yeladim,” or children’s house, instead of at their parents’ homes.
There are about 270 kibbutzim in Israel, of which about a fifth remain collective communes, according to Michal Palgi, director of the Institute for Research of the Kibbutz and the Cooperative Idea at the University of Haifa. The kibbutzim that have remained fully socialistic tend to be some of the wealthiest communes, she said.
Kibbutz Yotvata, in the Arava desert, for instance, has held on to its collective status because it built one of the largest dairies in Israel. Ein Hashofet, 27 kilometers east of Ma’agan Michael, owns three profitable companies, including a Tennessee factory that makes auto parts.
“The kibbutzim that found themselves in dire economic situations,” said Palgi, “had to say goodbye to their egalitarian system.”
Plasson, founded in 1964, had sales of about $270 million last year. The company’s products, which include plastic connectors for pipes and systems for feeding poultry, are now sold in 80 countries. Plasson provides about 250 to 300 jobs to kibbutz members in Israel and employs 1,200 workers globally.
The kibbutz controls Plasson’s board and the majority of its publicly traded shares. Managers mostly hail from Ma’agan Michael, and their salaries go to the community, with each member-executive only receiving the kibbutz-standard paycheck.
The system has worked because the kibbutz earns enough to give all members comfortable homes and free education through college. Posner, the Plasson chairwoman, says a bit of motivation for the new generation can’t hurt.
“It’s not a radical change,” she said. “Keep in mind we’re talking about a few hundred dollars.”
Or perhaps not even that much. Some backers of change have proposed offering those deemed to create greater economic value extras such as free house-cleaning instead of a higher salary.
In the cafeteria during a recent Friday evening Shabbat meal, diners pass a screen informing surfers of the next day’s tides. Unlike the vast majority of kibbutzim, Ma’agan Michael still offers communal dining, though recent changes may be emblematic of things to come: Until about a decade ago, everyone was welcome to take what they wanted from a buffet. Today, they have to pay, though it’s hard to spend more than about $10 a head, far cheaper than a typical Israeli restaurant meal.
Outside, children run freely under the shade of fruit trees while teenagers make bonfires by the beach. As kibbutz members grapple with the notion that their lifestyle may not stay intact forever, they may take inspiration from Posner, who has devoted 28 years to Plasson. When asked how she managed to be a corporate executive for decades while living like a kibbutznik, she smiles: “I learned to get fulfillment from the emotional recognition of my fellow members.”
To contact the reporter on this story: David Wainer in Tel Aviv at firstname.lastname@example.org
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