Month: November 2019

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Minority Stock Positions Stock Portfolio

BYD and Toyota Form Joint R&D Car Venture

(BRK.A), (BRK.B)

BYD Company Ltd. and Toyota Motor Corporation have signed an agreement to establish a joint company to research and development for battery electric vehicles (BEVs).

The new R&D company, which will work on designing and developing BEVs (including platform) and its related parts, is anticipated to be established in China in 2020, with BYD and Toyota to evenly share 50% of the total capital needed.

Additionally, BYD and Toyota plan to staff the new company by transferring engineers and the jobs currently involved in related R&D from their respective companies.

On the establishment of the new company, BYD senior vice president Lian Yu-bo said:

“We aim to combine BYD’s strengths in development and competitiveness in the battery electric vehicle market with Toyota’s quality and safety technology to provide the best BEV products for the market demand and consumer affection as early as we can.”

Toyota executive vice president Shigeki Terashi commented:

“With the same goal to further promote the widespread use of electrified vehicles, we appreciate that BYD and Toyota can become “teammates”, able to put aside our rivalry and collaborate. We hope to further advance and expand both BYD and Toyota from the efforts of the new company with BYD.”

BYD was founded in 1995 as a battery business and has grown into a total energy solution company, manufacturing not only electrified vehicles but other products such as large-size energy storage cells. The company name BYD stands for “Build Your Dreams” and core parts for electrified vehicles such as batteries, motors and power electronics are among the products that BYD develops in-house. In 2008, BYD became the first company in the world to sell mass production of plug-in hybrid electrified vehicles (PHEVs).

Since 2015 onwards, BYD’s sales of BEVs and PHEVs have been ranked first in the world for four consecutive years.

Since Toyota launched the Prius, the world’s first mass-produced hybrid electric vehicle (HEV), in 1997, the company has become a pioneer of electrified vehicle development with a focus on HEVs. Toyota has sold more than 14 million electrified vehicles worldwide and has accumulated extensive knowledge concerning the development, production, and sale of both HEVs and their related core components. Also, based on the thinking that electrified vehicles contribute to the society only when its popularized, Toyota is initiating electrification globally. In China, Toyota is also working on spreading electrification and also developing vehicles which meets Chinese customer’s needs in collaboration between Toyota Motor Engineering & Manufacturing (China) Co., Ltd. (TMEC) and the R&D centers established at Chinese joint-venture companies with China FAW Group Corporation (FAW) and Guangzhou Automobile Group Co., Ltd (GAC).

With the newly established joint R&D company, Toyota and BYD aim to work together to further develop BEVs that are attractive to Chinese customers, and by further promoting their widespread adoption, aim to contribute toward environmental improvement.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Minority Stock Positions Stock Portfolio

BYD Lands Mega Order from Los Angeles Department of Transportation

(BRK.A), (BRK.B)

New energy company BYD (Build Your Dreams) has announced that the Los Angeles Department of Transportation has ordered 130 of its battery-electric K7M buses.

The order is the largest single purchase of battery-electric buses to date in the United States.

The order is a major milestone for BYD as it continues its green dream to bring innovation and cutting-edge zero-emission technologies to forward-thinking communities and private enterprises. LADOT purchase is a signal to the market that zero-emission buses are here to stay and that their use will continue to spread.

The project fits perfectly with the City of Los Angeles’ “Green New Deal,” a set of sustainability goals that includes converting the entire LADOT fleet to zero-emission buses by 2030. The City of Los Angeles has set a bold goal of converting every city vehicle to zero-emission technology by 2050.

It is estimated the 130 buses will reduce greenhouse gas emissions by 8,225 metric tons per year and by 98,700 metric tons over the buses’ 12-year life, reducing greenhouse gas emissions by 81% compared to LADOT’s compressed natural gas buses.

“We applauded LADOT for its bold leadership, ambition, and desire to improve the air quality for the City of Los Angeles,” said BYD North America President Stella Li. “BYD buses will be an important component of the city’s efforts to meet its sustainability goals. We are proud to partner with an agency that shares our green dream.”

The buses will be built at BYD’s Coach & Bus factory in Lancaster, California. BYD’s zero-emission buses not only meet but also exceed Federal Transit Administration “Buy America” requirements, incorporating more than 70% U.S. content.

BYD is the only battery-electric bus manufacturer that has both a unionized workforce and a Community Benefits Agreement, which sets goals for hiring veterans, single parents, second chance citizens, and others facing hurdles in obtaining manufacturing employment.

The 30-foot K7M has 22 seats, a range of up to 150 miles, and can be charged in 2.5 to 3 hours. The K7M is one of BYD’s top products. It has no air emissions and runs quietly, improving quality of life wherever it operates. With lower fuel and maintenance costs, the K7M has lower total cost of ownership than diesel or CNG.

BYD notes that it offers a 12-year warranty on its batteries, the longest in the industry.

LADOT has been working with BYD since 2014 when it conducted a 90-day trial of a battery-electric bus. In January 2017, city officials introduced the first of four K9S battery-electric buses acquired by the LADOT with a grant from the California Energy Commission.

LADOT is one of more than a dozen customers who have shown their confidence in BYD’s product performance and service to make additional orders. Earlier this year, Anaheim Resort Transportation added to its initial purchase by ordering 40 more buses from BYD. With this purchase, BYD has now sold more than 460 electric buses to customers in Southern California including airports, universities, private operators and transit agencies.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Benjamin Moore

Benjamin Moore Opens New Texas Distribution Center

(BRK.A), (BRK.B)

Berkshire Hathaway’s paint manufacturer Benjamin Moore has opened a new distribution center in Lewisville, Texas. The new 238,000 square foot distribution center will accommodate expansion, enhance service and welcome new job opportunities in the flourishing Dallas-Fort Worth market.

“Upgrading our distribution center will allow us to not only increase local business, but to support a thriving community through employment and business opportunities,” said Bill Johnson, Benjamin Moore Senior Vice President, Supply Chain. “We are thrilled to continue to grow our presence in the Dallas-Fort Worth market as our new Lewisville distribution center is equipped to support expanded business throughout the area.”

Benjamin Moore previously operated in a 70,000 square foot distribution center in Mesquite, Texas that will continue to serve as its manufacturing facility. By increasing its warehouse presence by more than 168,000 square feet, the new distribution center in Lewisville created 13 new jobs.

The facility is leased to Benjamin Moore by Cushman & Wakefield and is situated along East State Highway 121, in a flourishing area of Lewisville that includes a variety of distribution centers.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Mouser Electronics

Mouser Electronics Touts its State-of-the-Art Distribution Advancements

(BRK.A), (BRK.B)

Berkshire Hathaway’s Mouser Electronics, Inc., the industry’s leading New Product Introduction (NPI) distributor, is highlighting its implementation of state-of-the-art Vertical Lift Modules (VLMs) at its global distribution center in Texas, USA, setting a national standard in technological advancement for distribution.

VLMs — essentially giant vertical filing cabinets, complete with shelves and an automated elevator — store tens of thousands of electronic components. When activated by the employee, the VLMs deliver the components directly to the workstation, vastly increasing efficiency and floor space. The automated machines can reduce an employee’s walking time by 45 percent or higher.

“The digital revolution is driving worldwide demand for electronic components,” said Glenn Smith, President and CEO of Mouser Electronics. “To meet this demand, we are making substantial capital investments in state-of-the-art automation systems to expand capacity and maximize efficiencies in our global distribution center.”

Mouser now has 55 Vertical Lift Modules — including 11 brand new modules. Now authorized for more than 800 manufacturers, the global distributor is expanding its footprint and growing its business position to meet increasing customer demand worldwide. The VLMs are expected to house up to 120,000 parts total once fully online, helping Mouser’s distribution teams greatly expedite orders for its 630,000 customers worldwide.

“We are excited to have the largest installation of Vertical Lift Modules in all of North America, a true testament to our belief in working smarter. With the 200,000 square foot addition to our warehouse more than halfway complete, our teams are laying the groundwork for several new automation systems,” Smith added.

Construction is also under way on a 50,000 square-foot office building addition on Mouser’s 78-acre campus at the Dallas-Fort Worth global headquarters. When complete, Mouser’s global headquarters and distribution center will consist of 1 million square feet to accommodate Mouser’s vast inventory of more than 1 million unique SKUs for products and technologies. Part of Berkshire Hathaway, Mouser now has 27 offices worldwide, including new offices in Poland, Vietnam and Brazil that opened this year.

With its broad product line and unsurpassed customer service, Mouser strives to empower innovation among design engineers and buyers by delivering advanced technologies. Mouser stocks the world’s widest selection of the latest semiconductors and electronic components for the newest design projects. Mouser Electronics’ website is continually updated and offers advanced search methods to help customers quickly locate inventory. Mouser.com also houses data sheets, supplier-specific reference designs, application notes, technical design information, and engineering tools.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Berkshire Hathaway Energy

NV Energy Hires Fire Mitigation Specialist

(BRK.A), (BRK.B)

With the massive California wildfires that bankrupted PG&E on everyone’s minds, Berkshire Hathaway’s NV Energy has proactively hired Mark Regan, a former fire marshal with nearly three decades of experience, its first-ever Fire Mitigation Specialist.

Regan will be part of the NV Energy team that implements the natural disaster protection plan required by Senate Bill 329, which includes the Public Safety Outage Management program. Regan will also work with fire departments statewide on efforts to reduce the risk of wildfires.

“Wildfires pose an increasing threat to our state and our customers,” said Kevin Geraghty, NV Energy Senior Vice President of Operations. “Mark’s expertise as a former fire marshal will provide us with important insight into developing and implementing safety programs that will help us reduce fire risk and keep our customers and communities safe.”

Prior to joining NV Energy, Regan spent the last seven years as Fire Marshal and Division Chief for the North Lake Tahoe Fire Protection District, and before that worked in multiple roles for the Sierra Fire Protection District. He has served as incident commander for numerous wildland fire emergencies and has been the lead investigator for multiple wildland fires. He also brings an extensive background in public safety education and outreach, having led 35 evacuation drills, including the largest full-scale drill in the state and the first bi-state evacuation drill with California and served as a public information officer.

“I am excited to be part of this company that makes the safety of the communities it serves a priority,” Regan said. “I look forward to working with the NV Energy team and other stakeholders on the natural disaster protection plan and building partnerships with fire agencies and emergency management teams throughout the state.”

Regan is also the President of the Nevada Chapter of the International Association of Arson Investigators.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Lubrizol

Sientra Acquires Breast Implant Manufacturing Operation from Lubrizol Life Science

(BRK.A), (BRK.B)

Sientra, Inc. (NASDAQ: SIEN), a medical aesthetics company, has announced the acquisition of the dedicated FDA-approved silicone breast implant manufacturing operation in Franklin, Wisconsin, from Berkshire Hathaway’s Lubrizol Life Science.

Lubrizol will receive $20 million in cash and up to 607,442 shares of Sientra stock for assets comprised of dedicated manufacturing equipment, building improvements, in-process inventory, raw materials and supplies and the transfer of the intellectual property rights, processes and know-how necessary for Sientra to manufacture its breast implants.

The transaction is as follows:

• $14 million is payable in cash at closing.

• The balance of the cash consideration will be paid in a $3 million cash payment in 2021 and a $3 million cash payment in 2023.

• Sientra will also issue up to 607,442 shares of stock to Lubrizol Corporation if certain Sientra share price milestones are achieved over a 48-month period.

In exchange, Lubrizol Life Science will turn over to Sientra a turnkey, fully operational Class 3 breast implant manufacturing operation that is now 19 months into commercial scale-up with established capacity that continues a steady ramp to position the Company to meet its near-term and long-term commercial objectives. Importantly, this transaction culminates a win-win commercial relationship between Sientra and Lubrizol Life Science that began in 2016 with co-development to achieve the validated manufacturing processes and specifications necessary to gain FDA PMA supplement approval in April 2018.

Sientra has agreed to employ the majority of Lubrizol Life Science’s employees that are currently dedicated to the Sientra implant manufacturing operation in Franklin. The parties have also agreed to a transition services agreement and a long-term lease agreement of existing and expansion space in Lubrizol’s Franklin facility. Sientra’s tissue expanders will continue to be manufactured by Lubrizol Life Science in Victor, Montana and both companies will continue to collaborate on bringing innovative new products to the aesthetic market.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Minority Stock Positions Stock Portfolio

BYD Partners With AMPLY to Provide Charging Infrastructure

(BRK.A), (BRK.B)

With the high costs and operational complexities surrounding electric vehicle (EV) deployments within commercial fleets, EV manufacturer BYD (Build Your Dreams) has announced a preferred partnership with charging infrastructure provider, AMPLY Power.

The partnership allows fleet operators such as transit agencies, shuttle bus operators, universities, school districts, and municipalities to more rapidly migrate to electric vehicles through joint products and services encompassing vehicles and infrastructure.

In a 2018 survey by Greenbiz, fleet operators cited high cost and complex infrastructure as main deterrents in expanding their electric truck and bus pilots to full deployment. The two companies aim to answer these challenges by providing bundled, affordable solutions and charging infrastructure that guarantees uptime.

“Together, BYD and AMPLY Power offer a great benefit to our customers,” BYD President Stella Li said. “This partnership leads to a total and affordable solution that will help municipalities, universities and businesses achieve their climate goals.”

AMPLY provides comprehensive end-to-end services to fleet operators, including operational upgrades and utility interconnections, optimal charging strategy based on drive cycle and duty cycle, debt financing or grant funding for reducing capital expenditures, and implementing resiliency plans where needed. The company assumes the full financial responsibility of utility account and provides the fleet with flat usage rates. AMPLY also performs onsite operations and maintenance services, and invests in technology upgrades as the needs of the fleet evolve.

“If we want to accelerate electric vehicle fleet adoption, we must make it as simple as possible for commercial fleet operators,” said Vic Shao, CEO of AMPLY Power. “By establishing a relationship with BYD, we now open the door to vehicle and management options for operators, making the switch to electric even easier.”

BYD produces transit buses and motor coaches at its manufacturing plant in Lancaster, California. BYD is the only battery-electric bus manufacturer that has both a union workforce, covered by SMART Local 105, and a community benefits agreement, which prioritizes hiring of veterans, single parents, second-chance workers, and other groups that face obstacles to gaining manufacturing employment.

AMPLY and BYD have been working with joint customers since early 2019. This partnership formalizes the relationship as the two companies begin to deploy a number of electric bus customer projects, with the earliest expected to launch this year.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
BNSF

BNSF to be Sued by Environmental Groups Over Grizzly Bear Deaths

(BRK.A), (BRK.B)

Wildlife advocates have notified Burlington Northern Santa Fe Railway of their intent to sue the business over its role in trains in Montana killing numerous grizzly bears, which are protected under the Endangered Species Act.

A train recently killed two grizzly cubs near Whitefish. In addition, five grizzly bears died earlier this month near East Glacier Park as a result of railway activities. A train struck and killed a cow, which then attracted five bears to the tracks.

In five separate incidents, two died in train collisions and three were killed by cars on Highway 2.

This year alone, trains have killed at least eight grizzlies in Montana.

“While Burlington Northern has twiddled its thumbs for 15 years rather than taking essential measures to protect grizzly bears, trains have killed dozens of grizzlies, including at least four cubs,” said Sarah McMillan, Conservation Director at WildEarth Guardians. “This neglect, that has such lethal impact on protected bears, is simply unacceptable.”

The lawsuit targets BNSF’s railroad across northern Montana, which runs from eastern Montana, just south of Glacier National Park, and into Idaho. The best available data show that from 1980-2018, trains along its railways killed or contributed to the deaths of approximately 52 grizzly bears from the Northern Continental Divide Ecosystem.

Approximately 1.2-1.5 BNSF trains run per hour on these railways in Montana, averaging 35 miles per hour. There is a slight increase in train frequency at twilight, when grizzly bears often feed.

“The 67-mile stretch of railway between West Glacier and Browning is where trains reportedly killed 29 grizzlies between 1980 and 2002,” said Pete Frost, attorney at the Western Environmental Law Center. “Slowing the trains down, ensuring carrion are promptly cleared from tracks, and perhaps scheduling trains to run during the day and not at feeding time might reduce trains killing grizzlies.”

“The deaths of these grizzly bears and cubs was entirely preventable and there is no excuse for BNSF’s continued failure to safeguard the railroad from these lethal collisions,” said Josh Osher, Montana Director for Western Watersheds Project. “Whether it’s a lack of concern, laziness or just plain greed, it’s time for BNSF to be held accountable and to take immediate steps to stop further killings.”

The Western Watersheds Project notes that a company’s activities kill threatened species like the grizzly bear, it is legally required to propose solutions in a habitat conservation plan that then can lead to an incidental take permit. For more than 15 years, Burlington Northern has said it is working on a habitat conservation plan for grizzlies along its northern Montana train route, but one has never materialized.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
BNSF

BNSF Certifies Six New Sites

(BRK.A), (BRK.B)

Six new industrial locations have been awarded BNSF Railway Company’s Certified Sites designation.

Four of the new Certified Sites are the first for their state in Arizona, Minnesota, Mississippi and Missouri.

Two new Illinois Certified Sites bring the state’s total count to four.

In order to be considered for the designation, sites must undergo a thorough analysis, which includes an evaluation of environmental and geotechnical standards, available utilities, site availability and existing and projected infrastructure.

“Since the program’s inception in March 2016, BNSF’s Certified Sites have attracted more than $140 million of customer investments,” said Colby Tanner, assistant vice president, economic development. “This is a testament to our communities’ partnerships and commitments to keeping pace with the speed of development.”

The newly-designated Certified Sites feature hundreds of acres ready for industrial development:

• Becker Industrial Park, Becker, Minn. – Adjacent to US Highway 10 with easy access to two additional major highways, Becker Industrial Park consists of 67 acres of contiguous lots zoned for heavy industrial use.

• Duane Michie Industrial Park, Hayti, Mo. – Located one-half mile from the Pemiscot County Port Authority and in close proximity to two Missouri state highways and two interstate highways, Duane Michie Industrial Park has approximately 250 acres available for development.

• Springs Industrial Park, Holly Springs, Miss. – Just north of Highway 22 and about 40 miles southeast of Memphis International Airport, the Springs Industrial Park site has more than 1,200 acres available for development.

• Railplex Industrial Park, Surprise, Ariz. – Surprise’s two-square-mile Railplex is shovel-ready with all major utilities to site including water, sewer, power, rail and telecommunications. The Railplex has attracted over $150 million in capital investment with 292 acres available for development.

• Elion Logistics Park 55, Wilmington, Ill. – Elion Logistics Park 55 is a rail-served, mixed-use industrial park located off BNSF’s Southern Transcon. Up to 12 million square feet of potential rail-served sites are available.

• Lincoln Prairie South, Yorkville, Ill. – Situated at the intersections of State highways 34, 47, 71 and 126 plus access to I-88 to the north, I-80 to the south, and I-55 to the east, the Lincoln Prairie South site is a prime location for development of more than 220 divisible acres.

Certified Sites are a part of BNSF’s Premier Parks, Sites and Transload program. The program is a strategic approach that addresses the increasing demand for customer site locations by developing various types of facilities across BNSF’s network. Businesses looking to locate at any of these properties could save six to nine months of construction time as a result of this analysis.

BNSF Certified Sites are reviewed by an industry expert in order to ensure accurate, reliable data. The goal of the program is to provide an inventory of rail-served sites that are available for immediate development.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Categories
Berkshire Hathaway Specialty Insurance Insurance

Berkshire Hathaway Specialty Insurance Names Javier Villalba as Head of Claims in Spain

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has appointed Javier Villalba to its expanding leadership team in Spain as Head of Claims.

“We are thrilled to have Javier, with his extensive industry experience, bringing BHSI’s commitment to claims excellence to customers in Spain and throughout Europe. Claims is our product — and Javier is exceptionally equipped to bring this product to the marketplace, the BHSI way,” said Ignacio Almazan, Country Manager, Spain, BHSI.

Javier comes to BHSI with nearly 20 years of claims experience. He was most recently Director for Expert Claims (Spain) and Claims Customer Relationship Manager at Zurich in Spain. Prior to that he spent 16 years in Claims at AIG, beginning as a claims adjuster and rising to the position of AIG South Europe Claims & Operations Officer. He earned a law degree from Universidad Complutense de Madrid and completed his studies in Procedural Law at C.E. Ignacio de Loyola.

Javier is based in BHSI’s office in Madrid.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.