When Specialist Thomas Wilson confronted Defense Secretary Donald Rumsfeld about the lack of armor to protect U.S. troops against roadside bombs in Iraq in 2004, neither man could have foreseen that the solution would come from Sasa, a kibbutz in Israel’s upper Galilee that remains loyal to its collectivist foundations.
For a brief period in the summer of 2000, Israel and the Palestinians appeared on the verge of peace. And although the Camp David talks ultimately failed, the prospect of a reduced Israel Defense Forces budget swayed Plasan Sasa, the IDF’s primary armor supplier, to become export-oriented.
Fast-forward to 2011 and Plasan sat atop Dun & Bradstreet’s annual list of largest kibbutz enterprises with around $850 million (3.173 billion ILS) in sales, thanks to its supply of vehicle protection kits to Navistar and Oshkosh, manufacturers of the U.S. military’s MRAP and M-ATV Mine Resistant Ambush Protected vehicles.
There is nothing inherently innovative about the manufacturing of armor, but what differentiated Plasan from its competitors was its ability to do so at a rate of about one thousand vehicles per month. It did this by providing the products as kits--what Plasan Chief Designer Nir Kahn calls “the Ikea wardrobe of flatpack vehicles”--and allowing its partners to assemble them on their own production lines.
Israeli-born Kahn, whose accent still betrays his northern England upbringing despite his return as a fresh university graduate 15 years ago, explains that Plasan’s customers care about three things: cost, weight, and the threat the armor is supposed to stop. He says the company’s advantage lies in its “proactive approach” of designing both the vehicle for the armor and the armor for the vehicle, and in the close cooperation between the designers, engineers, and testers, who all sit “quite literally under one roof.”
“We do hundreds, if not thousands, of rounds of projectile testing every single day,” Kahn says. “There’s the neighbor in Toy Story who’s always taking toys and blowing them up. So in our vehicle design engineering department we make the toys and pass them over to the guys who blow them up.”
The firm’s other advantage is the effort it puts into vehicle comfort and appearance, according to Kahn. “Plasan has led the industry in designing vehicles with a more progressive look. They are still military vehicles--they can’t be flower-power Volkswagens--but they project an image of humanity and progressiveness, which helps the soldier to be sure that when he rolls into that village he’s going to find friends rather than enemies,” he says.
Plasan sold more than 20,000 vehicle kits in the decade following 9/11, primarily to the U.S., but also to a small number of other countries including the United Kingdom. Now, given the U.S. military’s withdrawal from Iraq in 2011 and its imminent departure from Afghanistan, alongside the recent sequestration of the Pentagon budget, it makes sense that Plasan has shifted its focus to the civilian market.
“Perhaps because we’re a kibbutz company, we wanted our business to be based on things other than war,” Kahn says, although he clarifies that Plasan’s job has always been to protect people rather than to profit from conflict.
Given that it had the necessary composite materials, manufacturing facilities, and the ability to conduct detailed finite element analysis, it wasn’t such a leap for Plasan to make regular vehicles lighter, too. Today, the company is among the leading tier-one suppliers of carbon fiber parts to the automotive industry, supplying parts for the hoods and roofs of the new Corvette Stingray, SRT Viper, and other vehicles through its Detroit subsidiary Plasan Carbon Composites. Using its proprietary technology, Plasan produces parts for each sports car in 17 minutes instead of the industry standard 90-120 minutes. Its next goal is to bring this technology into the mainstream.
“Cars have been made out of pressed steel for the best part of 100 years, and up until now most efforts to change that have been about material substitution,” Kahn says. "We’re trying to change the conversation, to design the vehicle from composite materials for a high volume manufacturer. A high volume manufacturer in the military industry is one thousand a month, a high volume manufacturer in the motor industry is one thousand a day. But the principles are the same.”
Like most of his colleagues, Kahn does not live in Sasa. However, he acknowledges that the kibbutz’s ownership of Plasan helps instill a general feeling that the company belongs to its employees.
Dani Ziv, Plasan CEO and a Sasa resident since his days in the IDF’s Nahal Infantry brigade, says the company’s strength lies in its combining of commonplace industry values like competition with kibbutz values like democracy that don’t exist in the industry.
“Democracy creates a more open dialogue within the organizational hierarchy. Every manger’s door is open, and there is no distance between the VP and the people on the bottom floor,” Ziv says. “What differentiates Plasan from other companies in our market is that our people receive more responsibility, and if someone wants to take initiative he has more freedom to do so.”
The kibbutz ideology has made its mark on Plasan, but the company’s success has not altered Sasa’s commitment to the traditional collective model maintained by less than one-quarter of Israel’s 281 kibbutzim. If anything, says Sasa Treasurer and former Plasan employee Raul Cohen, the almost-overnight impact of the first MRAP contract in 2007 gave it the freedom to decide, rather than have the banks force it into privatization like other kibbutzim.
For a community with 220 members and a population of around 400 (residents are typically offered membership in their late 20s or early 30s) that previously subsisted off agricultural proceeds, it wasn’t easy dealing with sudden riches. It took 18 months for a formula to be devised, under which Plasan takes a certain percentage for investments, while the kibbutz spends its dividends on housing infrastructure, pensions, individual bonuses worth up to a few hundred thousand shekels (about $100,000) per member, and on the local elementary and high school.
As the primary purveyor of education to an area encompassing Druze, Circassian, and Arab villages and a number of other kibbutzim, Sasa takes its responsibilities seriously. Cohen, who arrived at the kibbutz from a poor city neighborhood as a 13-year-old in 1960, says that Sasa foots the multi-million-shekel education bill and sees the role of operating its schools as no less important than that of operating Plasan.
Cohen calls the decision to provide pensions--previously almost non-existent--a “personal and collective” promise. He says: “Any member who grows up here today lives safe in the knowledge that there will be enough money to take care of them if we remain a collective kibbutz, and even if we don’t remain collective the pension is substantial enough to ensure the member ages respectably.”