Personal History (100 page)

I also have gotten great pleasure from Warren’s partner, Charlie Munger, who came from Omaha originally, too. His voice and superficial mannerisms are amazingly like Warren’s. He founded the law firm of Munger, Tolles & Olson but has spent more time as an investor and as Warren’s partner. To the intense amusement of both of them, I made an enduring and pleasing impression on Charlie by solemnly taking notes, like a schoolgirl at the feet of the great professor, when I went to talk with him about investments, since, among other things, I now had the responsibility for family trusts. One of Charlie’s typical bons mots is his saying that he frequently reminds Warren “that the main risk we face as we scrabble on is not going broke but going crazy.”

Warren’s family has always been amused at the clash of our two cultures. Our lives had progressed along almost polar-opposite lines, yet we have so much in common. In many ways, we have influenced each other deeply, although Warren’s effect on my life is central to everything that followed, while mine on his is largely peripheral. Fairly early on, I wrote Charlie Munger about this mutual influence:

I believe my effect on Warren has mostly been limited to his life-style. I like to think that I had something to do with his improved eating habits, as well as his attire. Before he met me, junk foods, peanuts, ice cream, or ham sandwiches for breakfast were the norm; hamburgers and steak constituted nearly the entire range of his other tastes. Dinners at my house helped him to venture a little further afield. Warren later said, “You handled me at the dinner table like I handled you at the accounting books.” We both recall with great mirth one dinner when he bravely attacked a lobster, the likes of which he’d never seen before. He did a bit better when I tactfully suggested that he turn it over and try it from the right side. He later admitted that, “but for your help, I might still have been there weeks later, trying to go through on the totally impenetrable wrong side of that sea creature.” I introduced him to the possibility that a steady diet of fast food and cherry Cokes might not be the best for him, or even a steady stream of all-white shirts. I may also have influenced his spending habits to some extent. He was parsimonious in the extreme. Once, when we were together at an airport, I asked him for a dime to make a phone call. He started to walk some distance to get change for a quarter. “Warren,” I exclaimed, “the quarter will do,” and he sheepishly handed it over.

Beyond acquainting him with a few new foods and slightly more varied clothing, I also introduced him to a wide variety of people in journalism and government. In my early years of knowing him, I was convinced that Warren’s gifts were so extraordinary that he, like my father and my husband, would eventually tire of making money and want to perform public service and be engaged in world events. In this I misjudged him. What he loves is business—thinking and reading and talking about business. He is acute about public issues, but I can’t imagine him in government. Warren is only happy when he is unconstrained, totally in control of his own life, not forced to go to meetings or dinners he doesn’t want to go to or see people who don’t interest him or do things he doesn’t enjoy.

Warren has done so many things for me, but among the most important are the inroads he has made on my insecurities. Just as Ben had always reassured me on the editorial side of the
Post
, Warren, with his store of analogies and anecdotes—“Buffettisms,” I call them—and his constant bolstering, was very comforting to me. Early in our friendship I wrote him that “I didn’t know when I heard from you that you had become a large holder of Washington Post stock, that although your dividends might not make you rich, my dividends in psychic income would triple.” Warren not only knows business but he knows the communications business in a way
that I didn’t then and don’t now. He never calmed me down by false optimism but, rather, by shedding the light of reality as he saw it on whatever it was that was haunting me. He was always accessible—almost like having a personal business psychiatrist.

Warren is humanly wise, too, so naturally I began to share with him things in my private life. His comments always helped. One day I called him because I had been hurt by a friend. “Don’t forget,” he told me, “she has zero-based affection,” meaning that you always had to start from scratch, with no reservoir of goodwill or of love.

He knew me so well that he instinctively knew what might work with me. He once told me that someone in a Dale Carnegie course had said to him, “Just remember: We’re not going to teach you how to keep your knees from knocking. All we’re going to do is teach you to talk while your knees knock.” That’s what he then turned around and passed on to me: he helped me learn how to talk while my knees knocked. Warren summed up our learning relationship by suggesting that I seemed to go around as though I were seeing myself through the distorting mirrors of a carnival fun house. He saw it as his task to get me a better mirror that could eliminate the distortions. He later told me that he subscribed to Charlie Munger’s “orangutan theory”—which essentially contended that, “if a smart person goes into a room with an orangutan and explains whatever his or her idea is, the orangutan just sits there eating his banana, and at the end of the conversation, the person explaining comes out smarter.” Warren claimed to be my orangutan. And in a way he was. I heard myself talk when I was with him and I always got a better idea of what I was saying.

A
T ABOUT THE
same time that Warren came on the board, several things heated up within the company, particularly on the labor front. We had experienced a nightmare spring when the
Star
had decided to conduct separate bargaining meetings with the printers and had arrived at a separate settlement with the ITU, which was a serious break in our unity and one that very much disturbed me. Our summer had been as bad as our spring, with work stoppages and problems from both the pressmen and the printers. Negotiations with the printers had broken down in the face of many of their frivolous demands—like asking for a holiday for my birthday and then claiming we weren’t bargaining in good faith if we wouldn’t discuss it at the table.

Eventually, on September 22, 1974, after fourteen months of agonizing on-again, off-again tough bargaining, the
Post
and the printers finally signed a six-year contract. This was a watershed document that permitted gradual automation in the composing room and gave seven hundred
Post
printers lifetime jobs; we had the right to reduce that number through attrition
and buyouts. Most important, the contract ended the practice of reproduce, which by this time had mounted to the point where the perpage cost accrual was $84. We paid about $2.5 million to members of the union to get rid of the bogus. Ominously for the future, John Prescott reported on a conversation he had with Charlie Davis of the stereotypers’ union, who said that if he had been a printer he would never have given up reproduce. The rest of us, however, were ecstatic.

It was a landmark occasion, and another essential—and giant—step forward. John Prescott deserves great credit for the final settlement with the ITU, which we had been striving for for years. It was expensive in that we had to guarantee hundreds of jobs which had no reason for existing in the first place—the New York papers had set this precedent—but it was fair to both sides. Most significantly, it got rid of the worst problem that confronted us and the worst running sore in our sides—the constant confrontations with, animosity from, and slowdowns by the printers—which in turn helped us allay the potentially disastrous discontent brewing with the circulation dealers. Most of the dealers liked our system of their being independent businesses—the system paid them well and there were healthy incentives, as long as they didn’t have to cope with the problems of the long waits resulting from the slowdowns. But now the dissidents among the dealers created a new threat for us: they wanted to set their own prices for the paper. We met this danger by working out a deal that converted the dealers to an agency system, whereby they got paid for distribution of our paper, which we, not they, owned. The incentives remained good in a way that was both fair and profitable for them. This practice, too, was accepted, and the agency form of organization was actually picked up and copied by other papers.

Given these successes, it would seem as though John Prescott had a solid record, but in fact it was mixed. I continued to think that we were not making enough progress, and there was still a lack of firmness with the unions. With some reluctance, together with Larry Israel, who had been president of the company since Fritz’s death, I decided that we needed a stronger hand at the helm at the
Post
. With the acquisition of the
Trenton Times
, which we had made earlier in 1974, and the hoped-for acquisition of other papers, we “promoted” John Prescott to head of the newspaper division, which we established to include our share of the
International Herald Tribune
, our newsprint manufacturer, Bowater Mersey, the news service, and our newsprint warehouse. We also brought Mark Meagher down from New York, where he had been based since mid-1970, serving the company as vice-president for finance and administration. He now became executive vice-president and general manager of the
Post
, reporting directly to me as publisher.

Our timing couldn’t have been worse, coming as it did on the very day
we were to ratify the new contract with the printers’ union. I got a fair amount of flak over the decision about Prescott, but it was made, as always, with enough consensus from those whose judgment I trusted that I felt it was right.

So Mark Meagher took up the reins on the business side of the
Post
. What he found was ill-will throughout the building and low morale among the middle managers because of personnel changes. On the whole, the unions regarded management as incompetent yet able enough to try deviously to set them up as scapegoats for all of the problems that could more clearly be laid at management’s own door.

Mark was relatively new to newspapering but learned fast and did a fine job, beginning right away to get things in better shape. He worked hard on labor issues and trusted Larry Wallace to keep a steady hand on the rudder. Larry was a first-rate negotiator, but for years he took incredible heat for being tough and fearless in bargaining sessions. Mark did very well, too, in both labor relations and in equal employment—in promoting and hiring women and minorities, and bringing a renewed vigor to the business side of the paper.

But the pressmen, particularly, were giving us a lot of problems. What it came down to was that, after years of concessions to their union, of deals made over the water cooler, of surrenderings in order to avoid a strike at all costs, we were no longer in control of our own pressroom. We knew that to move forward we had to regain control, and in order to do that, we had to eliminate some of the more excessive clauses and featherbedding that reduced productivity, tied our hands, prevented us from managing the future of the paper, and threatened the economic well-being of the
Post
. Accordingly, early in 1975, we informed the pressmen’s local that in our negotiations toward a new contract we would insist on revision of those practices.

As 1975 wore on, we retrained executives in all the production processes needed if we were ever forced to publish without the craft unions. Many of those who had gone to Oklahoma City for the original training had not taken it very seriously; now we sent several people down to the
Miami Herald
to brush up on their production skills.

On September 17, Mark and I went to call on Joe Allbritton, who by then was acquainted with the lay of the land at the
Star
. We hoped he would understand the importance of sticking together for the pressmen’s-union negotiations. As I put it to Joe in this meeting, if we had to settle with the pressmen, it would undoubtedly affect the
Star
’s situation in the long run. Not surprisingly, Joe turned us down, saying he could not afford to spend another fifty cents. With the
Star
losing a million dollars a month at the time, he was probably right, but it seemed shortsighted to me.

After this, I thought about our undergoing a strike while the other paper
was publishing and concluded that we couldn’t “win”—largely because no one ever had. If the other paper published, advertisers had a way to reach people, and the struck paper simply would wither on the vine—unless, of course, it could continue to publish. I concluded that we would be operating at such a tremendous disadvantage that we couldn’t possibly take a strike at this time without endangering the paper’s existence.

It certainly was a bad time for a strike. The
Star
was gaining momentum. Allbritton was a fast learner, and, as Warren Buffett recalled, a strike at the
Post
was his sole hope, really. “If you owned the
Star,”
Warren suggested, “the way you were going to win was to have the
Post
shut down. If not, you were going to lose.… If Allbritton prayed for anything, he prayed for you not publishing for a considerable period of time, while people developed different reading habits.”

In my discussions with Mark in the late summer and early fall of 1975, I told him not to get us into a situation where we risked a strike. I was clear in saying that perhaps it would be better to extend the contract for a year or make yet another short-run deal than to take a strike alone. Mark pointed out that we were not negotiating with the union over strike issues, but that we had asked our supervisors to start managing and we had to back them up with measures that would permit them to do that. We agreed to live with most of our contract rules a while longer—to settle for a single contract change or two in order to show that change was coming, but to try to avoid a strike.