The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [251]
For the next six months, the Post would continue to publish while navigating fruitless negotiations, threats, violence, a logistical war of nerves, and a constant struggle to keep the torn Newspaper Guild from striking in sympathy. People were tackling all sorts of incongruous jobs to get the paper out; Don Graham worked as a paper handler, pushing huge, heavy rolls of newsprint to the presses.
“She had people telling her, including some of the people she respected most, ‘You’ve got to give in or you’re going to lose.’ They were afraid, they hated not publishing and seeing the Star gain on the Post.
“So I was the countervailing force. I said to her, ‘I will tell you before the tipping point is reached.’ The tipping point is the point at which the other guy becomes dominant, and after you go back, he is still dominant. There are fifty variables involved: the attitude of your employees when you come back, the impression that you’ve left on the community, the degree to which advertising has gotten better results from having shifted over. You’re gauging the likelihood of people changing their habits. They couldn’t get our columnists, or our comics, so the question is, at what point does it become more of a habit for them to buy the other paper?
“That’s probably what did the most for her. She believed me, and she was right to believe me. All I had were her interests at heart, and she believed that I knew enough about the business.”
But while “Warren encouraged her, it was her backbone, not his,” stresses George Gillespie.15
Her backbone had to be strong enough to support the whole company. Although nearly all of the Post’s employees other than the pressmen stayed on the job, the constant threat of violence hung over those who crossed the picket lines. Their tires were being slashed, and their families were getting threatening phone calls at home. A striker carried a placard that said “Phil Shot the Wrong Graham.” To keep morale up, Graham and Buffett and Meg Greenfield rolled papers in the mailroom. Buffett loved it, working circulation once again.
Two months into the strike, the Post had made a final offer to the pressmen, who rejected it.16 The strike dragged on, unresolved. Graham began to hire replacement workers, breaking the strike. The pressmen carried on picketing as if there was a chance of negotiation. But over the next few months, the paper gradually won back the remaining unions, readers, and advertisers, even though the picketing and bad publicity continued through the spring.
Just as Graham was slowly rescuing her company,17 Buffett and Munger had finally reached their settlement with the SEC. Now Buffett invited Munger for a steak dinner down at Johnny’s Café near the stockyards to finalize their “simplification” plan. He had decided to stop managing money for FMC on the side. Next, Blue Chip would sell its interest in Source Capital,18 and Berkshire and Diversified would refile their merger plan, formerly quashed at the beginning of 1975 by the SEC investigation. At Betty Peters’s request, Wesco, owned only eighty percent by Blue Chip, would remain a public company, and Munger would be chairman of that. Munger and Buffett deferred merging Blue Chip into Berkshire Hathaway until they could more easily agree on the relative values of the companies.
With both Berkshire and the Post emerging from the tumultuous times that had consumed his attention for so long, Buffett’s business routine began to normalize. The Post board meetings lost their edge of emergency, and Graham began thinking of expanding her empire.
Newspapers at the time were being snapped up left and right.