Wall Street Journal Story About Highly Acclaimed Takeover Wins Pulitzer
NEW YORK (AP) _ The Wall Street Journal has won its 14th Pulitzer Prize with a stinging report on the human suffering behind one of Wall Street’s most highly acclaimed leveraged buyouts.
The article about Safeway Inc., published last May, was criticized by the grocery chain at the time as so biased ″it defies reasonable discussion.″
The 8,000-word report by Susan C. Faludi on Safeway’s debt-financed takeover described an oft-overlooked side of the buyout binge of the 1980s.
The Pulitzer award was announced Tuesday.
″I was really interested in looking at it from the bottom up,″ Faludi, 31, said. ″I think any story that sort of forces business executives to look at the moral consequences of their decisions is important.″
Safeway, a publicly held company, was sold in 1986 to a group headed by buy-out specialists Kohlberg Kravis Roberts & Co. To reduce Safeway’s staggering $5.7 billion buyout debt, the Oakland, Calif.-based supermarket company eliminated its least profitable stores and shrunk from 2,326 stores to 1,117.
In the wake of layoffs and store closings, Safeway finished 1989 with a $3 million profit on $14.3 billion in sales, its first profitable year since the buyout.
About 63,000 Safeway workers were let go in the four years since the buyout.
Faludi described the first anniversary of one veteran trucker’s layoff: ″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.″
One Dallas family lost three incomes on the same day after the pink slips were distributed. Other employees who remained on saw their income slashed, with average wages dropping to $6.50 from $12.09 an hour in 1988.
Safeway denounced the story when it was published and criticized it again when the Pulitzer award was announced.
In a letter published in the Journal last June, Peter A. Magowan, Safeway’s chief executive officer, said the article betrayed ″a human bias that is so sharp and so deep that it defies reasonable discussion.″
″I think they got this confused with the Pulitzer prize for fiction,″ Safeway spokesman Bob Bradford said Tuesday, after learning of the prize.
″The great success for investors of the Safeway leveraged buyout made it important that business readers understand the deal’s human side as well,″ Norman Pearlstine, managing editor at the Journal, said in a statement.
″Susan Faludi provided that understanding through brilliant reporting and penetrating analysis. We’re very proud of her work.″
Faludi, a resident of San Francisco with background in newspaper and magazine writing, joined the Journal in January, 1990, as a reporter in the San Francisco bureau - just three months before the prize-winning article’s publication last May.
Born in New York, Faludi graduated with a BA in History and Literature from Harvard University in 1981. She started as a news assistant at The New York Times, and joined The Miami Herald in 1982 as a reporter. In 1983 she became a reporter and writer for the Atlanta Constitution’s Sunday magazine.
In 1985 Faludi became a staff writer for West, the Sunday magazine of the San Jose Mercury News.