An OP-ED ARTICLE OF AUG. 23 ON REGINALd Lewis' proposed acquisition of the international operations of beatrice foods incorrectly included tropicana orange juice, wesson cooking oil and hunt's tomato products among the operations purchased. They are american companies and are not part of the deal. (Published 4/26/87)
There was a remarkable story in the papers the other day about a 44-year-old black man who recently agreed to purchase the international operations of one of the world's largest food products companies, Beatrice Foods, for $985 million.
The account raises tantalizing questions about the status and prospects of black people in a society in which one black man can raise almost a billion dollars to buy a company despite the legacy of racism and discrimination that keeps the larger black community at the bottom of the scale of well-being in America.
If, as expected, Reginald Lewis' purchase of Beatrice's international businesses is consummated, a black man will own 64 companies that produce and market such familiar products as Tropicana orange juice, Wesson cooking oil and Hunt's tomato products in 31 countries around the world.
Lewis, a New York attorney, would also become the owner of what will be by far the largest black business in America. Beatrice's international operations accounted for $2.5 billion in sales and $147 million in profits last year; the next largest black firm, Johnson Publications, with $173.5 million in sales of Ebony and Jet magazines and other products, is less than one-fourteenth the size of Beatrice's overseas businesses.
In all of the papers I read -- The Wall Street Journal, The Washington Post, The New York Times -- the story of Lewis' acquisition appeared on the financial pages. And a wonderful financial story it is, a story of how an investment of $1 million three years ago by TLC Group L.P., Lewis' family-owned investment concern, has turned into control of a company 2,500 times larger.
I wonder, though, if the story doesn't also belong on the national news pages of these publications. There, after all, is where news of important events that affect the black community and that highlight its status in America usually appears. Does a black man's purchase of a $2.5 billion company have any overall significance for black people in the America of the late 1980s? Or is it just a story of one man's triumph, of no more importance to blacks than the latest antics of Boone Pickens or Carl Icahn or Asher Edelman?
Lewis' ownership of Beatrice's international operations will not have any immediate impact on the family, education, drug or crime problems of the ghetto communities that fester in every American city. It will not help black police officers, firefighters or factory workers obtain promotions or keep their jobs in the face of layoffs. It will not transform black accountants, lawyers or MBAs into partners in the firms that employ them.
To appreciate the meaning for black Americans in Lewis' triumph is to realize, first, that even those blacks who seem most successful and well-integrated often confront racially based skepticism and doubt in their professional lives.
Lewis' acquisition "does a lot for me," said James Norton, a managing partner at UNC Ventures, a Boston-based black venture capital and investment banking operation. "When I go in to do a 10- or 20- or 30-million-dollar deal, it strengthens my hand. It says to the people on the other side of the table that black folks can get things done."
Norton also expects Lewis' acquisition of Beatrice's overseas businesses to benefit black managers in other industries. He points out that Lewis plans to keep the existing management of Beatrice in place, just as he did at the McCall Pattern Co., which he bought for $24.5 million in 1984. After receiving $19 million in a recapitalization plan last year, Lewis sold McCall last month for $63 million and used the profits from that sale in his Beatrice transaction.
"He will have a majority ownership of a company where successful white managers have agreed to continue working," said Norton. "That has to be helpful. . . . It will have a beneficial effect on some of these attitudes that white managers have about the competence, the strengths and weaknesses of blacks."
"It changes the scale of activity for blacks," said Jim Haddon, a black vice president at Paine Webber, the New York investment bank. "People think they've done something when they buy a house for $150,000 and sell it a few years later for $300,000. This says you can think a lot bigger, and think it realistically."
Lewis is one more piece of badly needed evidence that the ceiling on black aspirations in America has risen substantially.
White people's accomplishments do not automatically translate for blacks into proof that the same opportunities are possible for them. Ronald Reagan's being president of the United States, for example, may say to white children that anyone can rise to the highest office in the land. It does not carry that same message for black children.
We ask a lot from poor black children when we ask them to ignore the evidence of their own surroundings and to believe that staying in school, working hard and postponing gratification offer them their best chance of living fulfilling and enjoyable lives. Children in the inner city are more likely to hear and believe that the available route to the good life leads through the basketball court, the recording studio or even the drug transaction than that it leads through Wall Street or a corporation.
Indeed, it requires a substantial degree of faith for young black people to take the exhortations of their parents, their teachers and the leaders seriously. We still live in a country where a white high school graduate can expect to earn more money than a black college graduate, where whites will burn down houses on their block or pull their children out of public school to avoid integration.
Ultimately, though, the point has little to do with white people. What is important is that we have progressed to a stage at which black people can attain real success in this country within the rules and structures of the mainstream.
Reginald Lewis is not the first example of the kind of rewards that can come to black Americans who buy into the assumptions of the mainstream. But he is one of the best examples. And his story can supply a commodity as precious and in as short supply as any other for blacks -- hope.
The writer is a former reporter for The Post who now works for Dow Jones & Co. in New Jersey.