To understand the Coca-Cola (KO) Company’s recent, senseless decision to fire 20 percent of its work force, thereby dumping 6,000 employees and their families out on to the street, one needs to understand the real Warren Buffett and the real Herbert Allen Jr. These two investment gurus, who are worth $40 billion and $1 billion respectively, were the members of Coke’s board of directors who orchestrated the blood bath. Hoping to get a pop of a few dollars in the price of Coke stock, Mr. Allen and Mr. Buffett demonstrated a stunning insensitivity to the lives of those affected. Did these billionaires really need the money? Previously known as a company that treated its workers well, Messrs. Allen and Buffett have in one ugly maneuver turned Coke into a company where 2,500 employees in the Atlanta headquarters were humiliated by being escorted from the premises by security men.
From a business perspective, the slash-and-burn approach may not have been necessary. The board operated with tunnel vision, overpowered by these two tycoons who are probably the board’s largest shareholders. If they wanted to trim the work force, they could have allowed for natural attrition over the course of several years. Thousands of families would not have been jeopardized, and Coke would have done just fine. But Mr. Aw-Shucks (Mr. Buffett) who operates Berkshire Hathaway, his holding company, from Omaha, and Mr. Smoothie (Mr. Allen), a so-called behind-the-scenes kingmaker who runs the weekend retreat for media moguls at his Sun Valley, Idaho, home, cared more about their stock price than about how the ex-Coke workers would buy groceries and pay their kids’ doctor bills. Indeed, Douglas Ivester, Coke’s chairman, suddenly resigned in December, reportedly because he did not want to oversee the carpet-bombing of his own work force. Mr. Aw-Shucks and Mr. Smoothie initiated the carnage without a moment’s hesitation. But who cares about the lives of the hard-working Americans who were dumped, not to mention the thousands of workers overseas who with the stroke of a pen were dismissed.
Mr. Allen came into Allen & Company when his Uncle Charlie retired and left the firm to him. Mr. Buffett was mentored by Ben Graham, the dean of securities analysis. One doubts that Uncle Charlie or Professor Graham would have had the greedy sensibility to devastate the lives of the many thousands in the Coke family. If the company were in serious trouble, this sort of approach could have some validity. But just to make a few bucks for yourself given the human cost involved just doesn’t seem right.
Sharpton Versus the Post
The Rev. Al Sharpton is suing the New York Post for libel. He objects to the newspaper’s characterization of him as a carpetbagger and its assertion that he bears some blame for a fire in 1995 in Harlem that killed seven people. He contends, if you can believe this, that the Post has damaged his reputation.
If Mr. Sharpton actually follows through–a dubious proposition–the public may learn a great deal about the man who fancies himself a civil rights leader and a power broker in the New York Democratic Party. It will be interesting to see how he responds to questions about his finances, his cronies (like the Jew-hating Khallid Muhammad and Louis Farrakhan) and, indeed, his actual place of residence. Mr. Sharpton says he lives in New York, but he doesn’t provide an address. As for the tabloid’s accusation that the Reverend bears some responsibility for the fatal fire, recall that at a rally outside Freddy’s Fashion Mart in 1995, he talked about ousting the “white interloper” who ran the store. A street vendor named Roland Smith later entered the store with a gun, told black patrons to leave, and set fire to the place. Seven people died.
In court papers, the man who gave us Tawana Brawley charged that the Post had acted “with gross and reckless disregard for the truth.” Of course it is Mr. Sharpton who has shown a disregard not only for the truth but for decent standards of a civil society. He has never repudiated the hate-filled speeches of Mr. Muhammad, who loudly calls Jewish people “the bloodsuckers of the black community” and who has done his best to incite riots during youth marches in Harlem. Mr. Sharpton recently provided a platform for the Rev. Charles Norris, who warmed up the crowd for a speech by Hillary Clinton with anti-Semitic references.
So let the proceedings begin. No matter how many lawsuits he brings, Al Sharpton’s biggest enemy isn’t a newspaper; it’s the truth.
A New Parking Privilege
It’s common knowledge in New York that those who drive halfway decent cars, and who want to keep those cars, must cough up a hefty monthly rent for a secure parking garage. To park on the street is as good as handing your car keys to a thief. Or is it? Over the past 10 years, the city has experienced a spectacular, 74 percent decrease in auto theft, thanks to a crackdown by the Giuliani administration. The last time New York saw this few cars stolen was 1965.
To grasp the profound change, consider: In 1990, reports The New York Times , almost 147,000 cars–one of 12 cars registered in the city–was stolen. In 1999, that number was 39,000. While new, high-tech antiburglary gadgets certainly played a part, New York’s decline was far greater than the rest of the country. Why? Because the Police Department created investigative units to bust up car theft rings the same way they have nabbed drug dealers and mobsters. And prosecutors are making sure the car thugs get sent to prison. The Mayor deserves credit for returning a sense of safety to New Yorkers and those who come to our town for a visit.
