How to Win While Losing

Harry Weinberg, 53, is an up-from-the-slums entrepreneur who has made a fortune by buying faltering city bus lines and then paring payrolls, slashing services, and raising some fares. Robert Ferdinand Wagner, 52, the mayor of New York with ambitions for higher office, is a consummate politician who wants to stay on the safe side with bus riders and labor unions. Last week these two determined men collided on the streets of New York, snarling public transit from the Bowery to The Bronx. The nation's biggest metropolitan bus line was stalled by a strike, and Bob Wagner was pledged to wrest it from the control of Harry Weinberg.

Whipsaw. The trouble began when Weinberg set his sights on the Fifth Avenue Coach Line, whose routes lace Manhattan and suburban Westchester County. With the shrewd counsel of Lawyer Roy M. Cohn, 35, the boy Torquemada of the McCarthy era, Weinberg and friends bought up 23% of Fifth Avenue's stock for $3,500,000, put Weinberg in the driver's seat. Straightway, he began to complain that the company was barreling toward bankruptcy, demanded a fare boost from 15-c- to 20-c- to save it. Mayor Wagner, who had promised to hold fares down, would tolerate none of that. Roared Weinberg: "Somebody's a liar. Mayor Wagner says the company can operate with a 15-c- fare. I say it can't." Then Weinberg tried a whipsawing tac tic that he had previously used on balky city governments in Scranton, Pa., Dallas and Honolulu. Without higher fares, he warned. Fifth Avenue Coach would have to lay off 1,500 workers and cut down Sunday and night service. He began by sacking 29 workers, many of them old-time employees disabled on the job. In reprisal, Transport Workers Union President Michael Quill led his 6,500 Fifth Avenue Coach workers on strike, and for perhaps the first time in living memory found the public on his side. Weinberg slapped back with a $37,305,000 damage suit against the union, claiming it struck "wrongfully, willfully and wickedly." Mayor Wagner charged that Weinberg purposely provoked the strike to force a fare raise, and vowed that New York wanted no part of Weinberg. The mayor then ordered his city Board of Estimate to cancel the "temporary" city franchises under which Fifth Avenue operates 38 of its 80 routes, also petitioned the Republican-dominated state legislature to grant him immediate power to seize the rest of the company's city routes and to condemn its property. Harry Weinberg geared for battle. He had been through many struggles before.

Money Makes Money. Born in Austria and raised in Baltimore, Weinberg quit school in sixth grade to help out in his father's auto repair shop. This left him short on the niceties of syntax (for ex ample, he says of former Fifth Avenue Coach Chairman Howard Cullman: "He was entrusted of these stockholders with their money and he done as chairman a very bad job"). But Weinberg is a near genius at numbers.

He went into the tire-recapping business, got rich by investing in Depression-era real estate. By buying low and selling high, he made a fortune after the war in depreciated bonds of the Baltimore Transit Co., saw the huge--and often overlooked--profit potentials in city transit. He bought heavily into the Scranton Transit Co., then got control as its receiver after an eight-month strike drove it to the brink of bankruptcy. Typically.

Weinberg halved the payroll and chopped services, but Scranton Transit now rides in the black, and a union man says grudgingly, "That guy kept 125 jobs that might have been lost." Then he bought control of Honolulu Transit, used Honolulu Transit assets to buy Dallas Transit, and Dallas Transit money to buy control of Fifth Avenue Coach.

Down with Riders. Weinberg's swashbuckling tactics can hardly be regarded as a responsible answer to the woes of transit companies. He sets up no depreciation fund to buy new equipment, and the number of riders on his buses is skidding fast. His critics, who are many, charge that he intends to eventually liquidate his bus lines and keep only the valuable real estate holdings of his companies. Weinberg insists that he believes in providing only as much bus service as people are willing to pay for, a simple proposition that infuriates politicians who may be anxious to keep fares low by disguised subsidies.

Last week it looked as if New York's Bob Wagner would win the power to buy out Fifth Avenue Coach at a court-determined price and turn its runs over to other local lines. Even so, Wheeler-Dealer Weinberg stood to gain. Attorney Roy Cohn looked forward to a "bonanza." The company's book asset value is $50 million; if the court orders the city to pay only half that much under condemnation proceedings, Weinberg will get $36 apiece for shares that cost him $18. He wants more. "I think $120 million is a fair price for the company," says Weinberg grandly, with a grin. "And I'm going to cry if we don't get it."

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