Monthly Archives: January 2022

Berkshire Hathaway Clarifies That Annual Meeting to Be Held in Omaha

(BRK.A; BRK.B) – Earlier this week, we issued a press release announcing that the Berkshire Hathaway Annual Shareholders Meeting to be held on April 30, 2022 will be an in-person meeting. Since that time, we have received many questions about the location of the meeting. We now realize that we made an error in our earlier press release in not being clearer with respect to what we had taken for granted. We would never consider holding our shareholder meeting anyplace other than Omaha. We could not have a better venue than the CHI Health Center or a better city than Omaha for hosting our event.

As was stated in the earlier press release, additional information about the meeting will be included in Berkshire’s 2021 Annual Report which is scheduled to be posted on the Internet on Saturday morning, February 26, 2022. If there are additional updates regarding the meeting, they will be posted on Berkshire’s website at www.berkshirehathaway.com. In addition, as has been done for the past several years, the meeting will again be webcast.

Federal Judge Blocks Unions Strike Against BNSF

(BRK.A), (BRK.B)

A potential strike against BNSF Railway Company over a new point system for attendance has been temporarily blocked by a federal judge.

The threat of a strike by some 17,000 members of the Brotherhood of Locomotive Engineers and Trainmen, and the Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation had appeared imminent.

The U.S. District Court for the Northern District of Texas issued a Temporary Restraining Order (TRO) prohibiting both BLET and SMART-TD from authorizing, encouraging, permitting, calling, or otherwise engaging in any strikes, work stoppages, picketing, slowdowns, sickouts, or other self-help against BNSF or its operating rail subsidiaries over any dispute relating to BNSF’s new Hi Viz attendance policy and the standards in the policy.

The Brotherhood of Locomotive Engineers and Trainmen sent the following to its members:

Pursuant to the Court’s Order, BLET is hereby instructing all of its members employed by BNSF that they must NOT engage in any self-help against the railroad. This means that members must NOT engage in any strikes, work stoppages, picketing, slowdowns, sickouts, or any other activity intended to disrupt the operations of the railroad in response to BNSF’s Hi Viz attendance policy.

Further, pursuant to the Court’s Order, BLET is notifying and instructing all members who are now or who may in the future engage in any strike, work stoppages, picketing, slowdowns, sickouts, or any other activity intended to disrupt the operations of the railroad to immediately cease and desist all such activity and to immediately cease and desist all exhortations or communications encouraging same upon pain of fine, suspension, or other sanction by BLET. This means that any member who continues to encourage other employees on social media, or in any other forum, to engage in a strike, work stoppages, picketing, slowdowns, sickouts, or any other activity intended to disrupt the operations of the railroad MUST immediately stop doing so. Members who continue to do so risk fine, suspension, or other sanction by BLET.

The temporary restraining order is set to expire February 8, 2022.

© 2022 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.

Berkshire Plans Return to In-Person Annual Meeting

(BRK.A; BRK.B)

The Berkshire Hathaway Annual Shareholders Meeting will be held on Saturday, April 30, 2022. At this time, we are planning for an in-person meeting. In addition, as has been done for the past several years, the meeting will again be webcast. Additional information about the meeting will be included in Berkshire’s 2021 Annual Report which is scheduled to be posted on the Internet on Saturday morning, February 26, 2022. If there are additional updates regarding the meeting, they will be posted on Berkshire’s website at www.berkshirehathaway.com.

BYD Partners With Nuro on 3rd Generation Autonomous EV Delivery Vehicle

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD Co., Ltd. has partnered with leading autonomous vehicle company Nuro to begin producing the company’s third-generation electric autonomous delivery vehicle.

The partnership is expected to scale Nuro’s more affordable, eco-friendly, and convenient services to millions of people across the country.

“BYD will leverage the manufacturing capacity of our Lancaster, California plant by finishing assembly of globally sourced hardware components to support Nuro and bring more jobs to the community,” said Stella Li, Executive Vice President of BYD Co. Ltd. and President of BYD North America, “Together we will build this autonomous delivery vehicle, with the mutual goal of creating a safer environment on streets across the United States.”

The announcement follows Nuro’s $600 million Series D funding round which closed in Q4 2021 and was led by Tiger Global Management with participation from other investors.

Combining both partners’ advanced technology, Nuro’s third-generation autonomous delivery vehicle will feature greater payload and new safety technologies. With twice the cargo volume of Nuro’s current R2 model, the automotive production grade vehicle will also feature modular inserts to customize storage and new temperature-controlled compartments to keep goods warm or cool. Safety enhancements include an external airbag to further improve safety for pedestrians outside the vehicle, as well as a multi-modal sensing suite, including cameras, radars, lidar, and thermal cameras, creating a redundant 360-degree view.

Nuro was founded in 2016 by Jiajun Zhu and Dave Ferguson, former principal engineers of Google’s self-driving car team. Specializing in developing zero-occupant vehicles designed specifically for transporting goods and not passengers, Nuro has launched two generations of autonomous vehicles, introduced delivery service with industry leaders including Domino’s, Kroger, and 7-Eleven, and announced a multi-year partnership with FedEx.

“BYD is one of the largest OEM networks of electric vehicles in the world, and we are thrilled to partner with them to help us move one step closer to scaled commercial operations,” said Jiajun Zhu, Nuro co-founder and CEO. “We look forward to transforming the hardware components of BYD’s globally sourced electric vehicle platform into innovative autonomous vehicles capable of operating on public roads at our new facility here in America. Through our partnership with BYD, we plan to produce autonomous vehicles at scale that can improve road safety, air quality, and overall access to goods.”

As a leader in the NEV industry, BYD has innovated rich technologies in the field of electrification. In this project, BYD is jointly working with Nuro on vehicle development, and is responsible for vehicle manufacturing and initial vehicle testing, and provides hardware like the Blade Battery, electric motors, electronic controls, and displays for human-machine interaction. Nuro integrates technologies such as autonomous driving, control modules and sensors. BYD will finish assembly of the hardware platform at its Lancaster plant in the United States using globally sourced components. Nuro will then complete the vehicle manufacturing process by installing and testing the autonomy systems that will make the platform capable of operation at the company’s new facilities in southern Nevada.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares for $232 million. It’s an investment that has paid off handsomely. Berkshire’s original investment of $232 million had grown in value to $5.897 billion as of December 31, 2020.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a 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.

Lessons From Warren Buffett: Avoid Low Barrier to Entry Businesses

New types of businesses are popping up all the time. It is the nature of the business world that people throw their hats in the ring and launch new enterprises. For Warren Buffett, as a long term investor, he is looking for businesses that have a high barrier to entry that keeps them from being swamped with competitors.

“There are some industries that are just never going to have barriers to entry,” Warren Buffett said at the 2012 Berkshire Hathaway Annual Meeting. “And in those industries, you better be running very fast because there are a lot of other people that are going to be running and looking at what you’re doing and trying to figure out, you know, what your weakness is or what they can do a little bit better.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2021 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.

Marmon Retail Solutions Acquires Two Companies

(BRK.A), (BRK.B)

Marmon Retail Solutions has acquired Big Red Rooster Flow and Project CSI, effective November 18, 2021. The acquisitions were just announced and the terms were not disclosed.

Together, BRRF and Project CSI are one of the largest providers of end-to-end program management and construction services to the retail fuel, retail drug and quick-serve restaurant channels. Their services include retail site surveys, site branding and remodeling, procurement of all necessary materials for project execution, and overall management of strategic brand programs.

Based in Northfield, Illinois, BRRF uses a proprietary software program that integrates with its customers’ systems to help retailers track programs and manage their brands. Based in Fishers, Indiana, Project CSI manages installation of interior and exterior branding and remodeling programs at retail sites throughout the U.S. using contracted crews. The company also provides ongoing audit services to ensure brand accuracy and overall program execution.

Rob Mead at BRRF and Chris Pratt at Project CSI will continue to lead their respective companies.

“We are excited to have BRRF and Project CSI join our group of companies,” said Jason MacGregor, Group President of Marmon Retail Solutions. “Both have earned outstanding reputations for providing innovative and dependable services. Together, they will significantly bolster the offerings of Marmon Retail Solutions and help us continue to grow in service to our valued customers.”

Marmon Retail Solutions provides retailers and brand marketers worldwide with comprehensive products and services for an array of retail environments. The group includes L.A. Darling, DCI Marketing, Trade Fixtures, Eden, Retail Space Solutions, Commercial Zone, Store Opening Solutions, Unarco Industries, Artform Creative, and Cannon Equipment.

Marmon Retail Solutions is part of Berkshire’s Marmon Holdings, Inc., which comprises 11 groups and more than 100 autonomous businesses with total annual revenue of $10 billion. Marmon’s 20,000-plus team members serve diverse industries and markets worldwide.

© 2022 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.

MidAmerican Energy Announces “Wind PRIME” $3.9 Billion Renewable Energy Project

(BRK.A), (BRK.B)

Berkshire Hathaway’s MidAmerican Energy is planning a $3.9 billion renewable energy project in Iowa, including wind and solar generation, and the exploration of new technologies to advance the company’s transition to net-zero greenhouse gas emissions.

In a filing with the Iowa Utilities Board, MidAmerican’s proposed project, called Wind PRIME, would add 2,042 megawatts of wind generation and 50 megawatts of solar generation.

The company also proposed conducting feasibility studies focused on other clean generation technologies, including carbon capture, energy storage and small modular nuclear reactors.

Wind PRIME will continue MidAmerican’s long history of supporting Iowa communities and advancing the state’s position as a leader in renewable energy. Since 2004, the company has invested approximately $14 billion in renewable energy projects across Iowa.

“Iowa is a renewable energy leader, thanks in large part to MidAmerican Energy’s proven track record of clean energy commitments and investments that are a true competitive advantage for our state,” Iowa Governor Kim Reynolds said. “MidAmerican’s Wind PRIME is a commitment and investment on a whole new level, cementing Iowa’s clean energy leadership for many years to come. Beyond that, though, the company’s commitment to study and pursue emerging clean energy technologies will help Iowa meet the growing demand for a sustainable economy that manages our carbon footprint.”

Wind PRIME, MidAmerican’s 13th renewable energy generation development, is aptly named to both convey that now is the prime time to embark on this opportunity, and to reflect that although wind is an essential component, the project also includes solar energy generation and the examination of new clean energy technologies that will be an important part of the net-zero transition.

“As MidAmerican continues to progress toward delivering 100% renewable energy to our customers, we are also preparing to meet an important milestone of net-zero greenhouse gas emissions,” Kelcey Brown, president and CEO of MidAmerican, said. “The Wind PRIME project will position us and our customers for a sustainable future, while ensuring we continue to deliver affordable and reliable energy.”

Wind PRIME would result in significant benefits for the environment and MidAmerican’s customers:

• Deliver 100% renewable energy to customers – In 2021, MidAmerican estimates that it delivered 88% renewable energy on an annual basis to customers across the state. When combined with MidAmerican’s other projects, the 2,092-megawatt Wind PRIME project would allow MidAmerican to provide renewable energy equal to its Iowa customers’ annual usage.

• Carbon reduction – While thermal generation will remain a necessary part of the portfolio to ensure reliability for customers, the completion of Wind PRIME, in conjunction with existing noncarbon resources, is projected to result in an overall reduction of CO2 by nearly 14 million metric tons, or approximately 75%, from 2005 levels.

• Striving to reach net zero – Wind PRIME also proposes the study of emerging technologies, including energy storage, carbon capture and small modular nuclear generation, that will help expand MidAmerican’s ability to meet its customers’ demand for renewable generation as well as lower-carbon and noncarbon generation.

MidAmerican estimates that the Wind PRIME project will create more than 1,100 full-time jobs during the construction phase and another 125 full-time positions for ongoing operations and maintenance.

In addition, Wind PRIME will provide an average of $24 million-plus per year in local property tax payments on wind turbines and solar facilities, as well as more than $21 million in annual landowner easement payments.

If approved, the company plans to complete construction in late 2024.

© 2022 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 a 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.

Kraft Heinz Finalizes Acquisition of Just Spices

The Kraft Heinz Company has completed its acquisition of an 85% stake in Germany-based Just Spices GmbH.

The remaining 15% ownership stake has been retained by Just Spices’ three founders, who will continue on with the company and focus on driving the business and its international growth.

The proposed deal was first announced on Dec. 10, 2021.

Launched in 2014, Just Spices is an innovative start-up, trailblazing the high-growth taste elevation category with annual sales of approximately €60 million. Its 170-plus product portfolio includes spice blends, salad dressings, easy-to-prepare “In Minutes” blends, and organic offerings for diverse meal occasions ranging from breakfast and light snacks to salads and baking, with a broad range of savory, sweet, classic, and exotic flavors. Just Spices’ growing business sells approximately 70% of its ready-made and one-step spice blends directly to consumers, with its remaining sales through major grocery retailers both in-store and online in Germany, Spain, Austria, and Switzerland.

“In 2021, we announced four acquisitions to further accelerate our growth agenda and our ambition to be No. 1 in taste elevation around the world,” said Rafael Oliveira, EVP & President, International Markets at Kraft Heinz. “These include our acquisition of a majority stake in Just Spices, along with our intention to acquire a majority stake of the outstanding equity interests in Brazilian food company Hemmer, our investment in BR Spices in Brazil, and our acquisition of Assan Foods in Turkey. With Just Spices, we will leverage Kraft Heinz’s scale and agility to accelerate the business in the fast-growing taste elevation market beyond the company’s current German base and its recent market entries in Spain, Austria, and Switzerland. We also see tremendous potential to further strengthen and enhance Kraft Heinz’s own direct-to-consumer operations and go-to-market expansion.”

“We are extremely excited by the expansion opportunity that comes from combining Just Spices’ innovation and brand power with the Kraft Heinz team and the scale and knowledge of international markets they bring to the table,” said Florian Falk, Just Spices CEO and one of the company’s three founders.

© 2022 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.

Lubrizol Life Science Health Expands U.S. Medical Device Design Center

BRK.A), (BRK.B)

Lubrizol Life Science Health has completed a major expansion of its U.S. Medical Device Design Center in Corona, California, to enhance collaboration with customers across the full product lifecycle.

This significant investment adds a dedicated development cell with test lab and pilot lines, including an additional 2,600 square feet of ISO-7 cleanroom space. The expansion also includes additional square footage for future development and manufacturing cleanroom space. To promote collaboration, the expanded site now includes areas accessible to customers who are working with the Lubrizol design team.

The U.S. Medical Device Design Center team is led by Eric Mabry, Senior Manager of Device Design, who brings more than 35 years of experience in medical device design and engineering, including balloon development expertise, to the role. The device design team functions as an extension of customer research and development teams by providing innovative designs of catheters and delivery systems in structural heart, electrophysiology, cardiovascular, neurovascular, and peripheral vascular markets.

Strategically located in the heart of Southern California’s medical device industry, the 53,000 square-foot facility is equipped with test laboratories for device testing and benchmarking, prototyping and development, and cleanrooms for volume production.

The U.S. Medical Device Design Center’s capabilities include:

  • Precision extrusion
  • Braid- and coil-reinforced catheter designs
  • Catheter reflow and assembly
  • Catheter and delivery system handle design
  • Balloon design, bonding, pleating and folding
  • Catheter and device performance testing (including burst and leak testing)
  • Rapid prototyping
  • Laser welding, cutting, and drilling
  • Final device packaging

Lubrizol Life Science Health capabilities at the U.S. Medical Device Design Center are complemented by a similar integrated design and development center near Munich, Germany. The full device design team across the U.S. and Europe includes more than 35 engineers and technicians with a combined total of over 425 years of experience and more than 85 patents. There are 110 employees at the U.S. Medical Device Design Center across all phases of design and manufacturing.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a 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.

BYD Wins Contract to Extract up to 80,000 Tons of Metallic Lithium in Chile

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD has been awarded a contract to extract up to 80,000 tons of metallic lithium in Chile.

Chile’s Ministry of Mining awarded BYD the contract to extract up to 80,000 tons of metallic lithium after the company won the contract with an offer of $61 million.

BYD is the second largest EV battery manufacturer in China.

“BYD always had a global and sustainable view of technological development, aiming to expand our business worldwide,” said Stella Li, Executive Vice President of BYD and President of BYD North America. “Chile has become the best example of adaptation and vision for the future, demonstrating that its stability and commitment to innovation have positioned it as a leader in Latin America. BYD has been part of these processes, focusing on innovation and bringing to Chile the technology that will help build a sustainable ecosystem in the country. We started with electromobility, and today we will add value to lithium extraction and production.”

Tamara Berríos, Country Manager of BYD Chile, said Chile, one of the countries with the largest lithium resources globally, plans to meet the increased global demand for lithium. Chile’s lithium production will help future growth of clean transportation technology and fight climate change.

“We have promoted clean public transportation with electromobility for years and have introduced the first pure electric bus fleet with lithium batteries in Chile to achieve its zero-emission goals,” Berrios said. “We hope to contribute to the local lithium market with 27 years of experience in battery technology. Our R&D in the battery industry will strengthen Chile’s sustainable and innovative development, both for its national mining industry and the different communities in the country.”

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares for $232 million. It’s an investment that has paid off handsomely. Berkshire’s original investment of $232 million had grown in value to $5.897 billion as of December 31, 2020.

© 2022 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a 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.