Sunday, July 06, 2008

Herut sold for 3 million dollar
















I did work for Herut in the Achziv Wastewater Treatment Plant construction and running in. That was about 18 years ago and already then I wondered how the company was surviving while paying such good salaries. My boss, Shmuel S., had a service luxury car, and his salary was like a Tahal's vicepresident. Herut was founded in 1918 and specialized in electromechanical projects, such as air conditioners, elevators, fire fighting, water softening equipment, and package wastewater treatment plants through it subsidiary ALCID. Herut was bought together with Shikun & Bnia by Sari Arison, and then joined with TAHAL, and then --- I dont know. It disappeared from my sight.

3 million miserable deflated dollars are nothing for a prestigious electromechanical contracting operation, only its large Holon Industrial Area plot is worth much more. Probably the company was making losses for a long time, since the time when it was owned by the Histadrut, the Workers Union, in the fifties.

But this low prices is a bad sign, it means that the branch I am working in, electromechanical installation, is not profitable, and has poor perspectives. That is the explicit reason why Sari Arison is selling it. The contracting business in Israel, she says, is very competitive and will offer no profitable opportinities in the near future. Which I knew for a long time, but am unable (unwilling) to internalize.

6 comments:

Anonymous said...

Although some organizations have the capacity to re-invent themselves over and over, most companies grow old and rotten and then they die. They become like hollow trees that have been eaten by termites - they appear to be mighty tall trees on the outside, the same as in their prime, but one push, one strong wind and they topple. Then in the clearing left behind , new seedlings sprout and occupy their space. You cannot draw any conclusions about an industry from its sickest member - what does the plight of General Motors tell you about the future of the world auto industry? - almost nothing.

J. said...

Herut, like many other old Histadrut (Labor Union owned) companies, has been agonizing for many years. However, others like Solel Boneh, have survived and are prospering. I hope you are right, and the fall of Herut does not signal the death of other electromechanical engineering firms. I hope it is not like the radio or TV repair business, which is dying or dead (electronics having become so cheap that no one repairs anything anymore).

Anonymous said...

Last time I looked people still needed engineers - what paradigm shift has there been so that they don't? Does water now treat itself?

Speaking of water treatment, there is an ejection pump in my basement which is below the level of the sewer main. The condensate drip from my air conditioner runs into a laundry sink and then into a small sump tank (maybe 10 liters) that sits on the floor and when the tank is full a float calls the pump on and it is ejected up into the sewer main maybe 2 1/2 meters above. When the house was originally built, the clothes washing machine also fed into this sink. Yesterday my wife noticed that there was a sort of burning electrical smell in the house so I went to investigate - after 50 years (yes I think that's how old this pump is) the float must have become stuck and the pump ran and ran dry. Eventually it shorted itself enough to blow the GFCI. Luckily it did not catch on fire (not much flammable around it anyway) but it make you realize how fragile it all is - the whole house could have been in flames before I knew what was going on, just because of this stupid little pump (though there are smoke detectors at that level). I must say though that whatever replaces this pump (I ordered a new one) will not be as sturdy - they don't make stuff like this any more. The tank is made (I think) from cast iron. The giant motor is not a submersible type but sits in the air above the pump. The whole thing must weigh maybe 40 kilos or more. The ejection pipe is copper. The replacement that I ordered is mostly made from plastic.

J. said...

Plastic pumps are perfectly good and durable. You should have thrown out the old pump a very long time ago.

Have you thought of trading your Buick 1958 for a newer model ? :-)

Anonymous said...

I realize that there will be nothing wrong with the replacement plastic pump (I hope). It seems to be a very nice little French made device made by Saniflo - it is more compact and seemed nicer made than the cheap looking American pumps that I looked at. But there is something about the solidity of old hardware that is lacking in the new - even if a new Mazda works better than a 1958 Buick, it is not as "real" as an old car. When I was growing up we had a 1956 Oldsmobile so I'm not romantic - know that the reality was not so great - before electronic ignition and fuel injection, when the weather was damp and cold, sometimes the car would start and sometimes it wouldn't.

But, I am the type of person that if I had a 1958 Buick and it was functioning well, I would not replace it. In reality one of our family autos is a 1996 Chrysler mini-van with 160,000 kilometers. It does not have the latest features - doors that open themselves, etc. but it runs reliably so I keep it. The same thing was true of the pump - it sat in the basement and did its job so it never occurred to me that I should replace it just because it was old - after all I am old too (maybe the same age as the pump). Replacing the pump is too big an effort to do as preventative maintenance. The pump alone was almost $200 and yesterday I took a trip to the plumbing supply and few elbows and a trap and so on added up to another $40. I am handy and will do the installation myself, but calling a plumber would have been at least another $200 (and possibly much more - under American plumbing codes every fixture must have vent pipe that extends all the way to the roof of the house, so if the plumber was going to comply with the code he would have to have run a pipe from the basement thru the middle of my house, up two floors, thru the attic and then cut a hole in the roof. To install this pump according to "code" would have cost thousands. Now such a vent is totally unnecessary - all over the world Saniflo sells this same pump with a little hole in the top of the sump box that acts as the air vent and this is all it needs (for the US they supply a cover for the hole)- there is a check valve so there is no possibility of sewer gas coming into the house but according to the code it must be vented to the roof anyway. The sump itself is not connected to a toilet, only to a laundry sink (today not even laundry - the only thing that goes in it is pure condensate water from the central air conditioner). You could breath the fumes from this all day and nothing would happen to you. But the law is the law without such subtle exceptions and it says that you should have a vent going to the roof, so calling a plumber might have cost thousands of $.

So any normal person would not want to spend thousand of $ to replace something not broken - so you see, it IS rational to have something in your basement that can burn your house down.

J. said...

Thanks for the answer. Regarding vent pipes, in Israel you can connect several appliances to the same air vent, so there would be no need for a new one. Anyway, no one follows the rules and no one inspects an old building. Only newly built houses need to be inspected by the Standards Institute or Isotop.

The French pump seems to me scandalously expensive. I dont know in the USA but in Israel the catalogue price is for the general public alone, and professionals get up to 80% discount on that price. You should bargain.

No one ever buys a French pump in Israel, if we want quality we go for the German Swedish Flygt pumps, and if price, we buy Italian pumps. The English have some specialized equipment but my experience with English machinery is discouraging. The Chinese are not yet exporting pumps, and the last time I checked, they were making Soviet type heavy iron pumps. But they learn very fast.