Seventh, while the staff is running around Speedy-ing things, we’ll never know what readers gave up in return for all those 200-word items about pharma industry talks and whatnot.
OAKLAND, Calif. — On the eve of the 1986 leveraged buy-out of Safeway Stores Inc., the board of directors sat down to a last supper. Peter Magowan, the boyish-looking chairman and chief executive of the world’s largest supermarket chain, rose to offer a toast to the deal that had fended off a hostile takeover by the corporate raiders Herbert and Robert Haft.
“Through your efforts, a true disaster was averted,” the 44-year-old Mr. Magowan told the other directors. By selling the publicly held company to a group headed by buy-out specialists Kohlberg Kravis Roberts & Co. and members of Safeway management, “you have saved literally thousands of jobs in our work force,” Mr. Magowan said. “All of us — employees, customers, shareholders — have a great deal to be thankful for.”
Nearly four years later, Mr. Magowan and the KKR group can indeed count their blessings. While they borrowed heavily to buy Safeway from the shareholders, last month they sold 10% of the company (but none of their own shares) back to the public — at a price that values their own collective stake at more than $800 million, more than four times their cash investment.
Employees, on the other hand, have considerably less reason to celebrate. Mr. Magowan’s toast notwithstanding, 63,000 managers and workers were cut loose from Safeway, through store sales or layoffs. While the majority were re-employed by their new store owners, this was largely at lower wages, and many thousands of Safeway people wound up either unemployed or forced into the part-time work force. A survey of former Safeway employees in Dallas found that nearly 60% still hadn’t found full-time employment more than a year after the layoff.
James White, a Safeway trucker for nearly 30 years in Dallas, was among the 60%. In 1988, he marked the one-year anniversary of his last shift at Safeway this way: First he told his wife he loved her, then he locked the bathroom door, loaded his .22-caliber hunting rifle and blew his brains out.
1. 9 TO NOWHERE
These Six Growth Jobs Are Dull, Dead-End, Sometimes Dangerous They Show How ’90s Trends Can Make Work Grimmer For Unskilled Workers Blues on the Chicken Line; By Tony Horwitz, December 1, 1994
2. A Deadly Exercise:
Practicing Falun Gong Was a Right, Ms. Chen Said, to Her Last Day — Cellmates Recall the Screams Of the Chinese Retiree Before She Died in Jail —`No Measures Too Excessive’; By Ian Johnson, April 20, 2000
3. “The Reckoning: Safeway LBO Yields Vast Profits But Exacts a Heavy Human Toll,” Susan Faludi, May 16, 1990.