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Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance Names Daniel Weinmann Head Customer & Broker Engagement in Germany

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance (BHSI) is expanding its European team, naming Daniel Weinmann as Head of Customer & Broker Engagement in Germany.

“With our broad range of products, financial strength and excellent service, BHSI brings a strong value proposition to the European marketplace,” said Andreas Krause, Country Manager for Germany, BHSI. “We are pleased to have Daniel, with his extensive experience and industry knowledge, delivering this value and expanding BHSI’s relationships with customers as well as global and domestic brokers in Germany.”

Daniel comes to BHSI with more than 20 years of insurance industry experience. He was most recently Head of Sales, Germany, for Swiss Re Corporate Solutions. Prior to that, Daniel was head of General Aviation & Aerospace EMEA and worked on the Broker side as well, as Head of Casualty at Marsh in Munich. He received his bachelor’s degree in Business Administration from the German Insurance Academy.

Daniel is based in BHSI’s office in Munich.

© 2020 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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BNSF

BNSF Announces Its Newest Logistics Center

(BRK.A), (BRK.B)

BNSF Railway Company (BNSF) has announced its newest logistics center, Logistics Center North Houston at Cleveland. Once completed, the rail-served development is designed to help businesses increase their reach and speed to the densely-populated Houston market and surrounding area. As with other BNSF Logistics Centers, customers locating at North Houston can save nine months or more of development time and expense.

“The reality of a BNSF Logistics Center is a game changer for Cleveland’s industrial future,” said Mayor Otis Cohn. “Cleveland is perfectly poised for such a development as it is a vital and important link in our national transportation system. Cleveland lends itself to transportation services, located strategically as it is, but it took a company like BNSF to see and realize that potential.”

Logistics Center North Houston at Cleveland addresses the needs of the ever-growing Houston market. Located next to I-69 and State Highway 105, the site provides unrestricted access to the Greater Houston area. With more than 1,100 total acres, the business park is capable of handling multiple commodities offering a rail-served site that is customizable to fit the needs of customers. The facility features more than 20 new customer sites and has the ability to serve both manifest mixed freight and unit train single commodity customers.

“BNSF’s Economic Development team strategically selects logistics center locations for the convergence of rail and road at underserved, key growing markets,” said Colby Tanner, assistant vice president, economic development. “When our customers utilize the knowledge and expertise of our economic development team, they can expect to save significant time and money when locating their facilities at these prime locations, such as the Greater Houston area.”

BNSF Logistics Centers focus on offering direct rail service in multi-customer, multi-commodity business parks. BNSF invests directly in the development of the facility to create sites in under-served, strategic, end-user markets. These facilities can service carload, unit train customers or both.

© 2020 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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GEICO Insurance

GEICO Files Federal RICO Lawsuit in California Against Glass Repairer

(BRK.A), (BRK.B)

Following several lawsuits in Arizona and Florida, GEICO has filed a federal lawsuit in California alleging an auto glass repair shop submitted fraudulent glass repair bills. GEICO seeks to recover damages alleging violations of the Civil RICO statute and the California Business and Professional Code as well as claims for common law fraud and unjust enrichment.

GEICO alleges that owners Tal Elzari and Navid Vatankhahan used their business, Winaffix Auto Glass, in a fraudulent scheme to overbill for windshield glass replacement.

Their alleged scheme involved creating false glass invoices designed to mimic those from legitimate car dealerships in order to fraudulently claim they were using expensive original equipment glass rather than less expensive alternative glass. In fact, it is alleged that Winaffix never purchased the glass their invoices claimed. They are also alleged to have performed glass replacement services without a license to do so.

GEICO says it intends to file future lawsuits in California and around the country in its continuing efforts to protect its customers and the public from fraudulent glass repair operators.

“GEICO is committed to protecting our customers from the negative effect that insurance fraud has on premiums,” said James Jones, assistant vice president of claims in GEICO’s Poway, California, office. “These incidents of fraud hurt consumers in California because they cause premiums to increase, and we will continue to pursue them with a zero tolerance.”

© 2020 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 Building Two-Megawatt Solar Energy Storage Project

BRK.A), (BRK.B)

Construction has begun on a two-megawatt solar and two-megawatt hour energy storage project developed by BYD (Build Your Dreams) and Apparent, Inc. at BYD’s Lancaster Coach & Bus manufacturing plant.

With this installation in place, the project will serve as a way to cut operational costs and offer a more sustainable energy solution for BYD. The site will give BYD the ability to maintain optimum power levels for manufacturing, while also generating renewable energy on-site. Powering the Lancaster plant is the first project that is a part of BYD’s and Apparent’s partnership to help deploy more efficient clean energy in Antelope Valley.

“This project showcases BYD’s commitment to a total green ecosystem with the ability to generate, store, and use zero-emission energy to power buildings as well as zero-emission vehicles,” said BYD North America President Stella Li. “BYD is the only company that can provide complete, affordable solutions.”

BYD selected Novato, California based Apparent, Inc. to design the solar+storage system based on Apparent’s intelligent grid Operating System (igOS™) hosted on SG424U micro-inverters. The software+hardware platform will manage real and reactive power produced by the system, communicating and controlling individual energy signatures to meet demand in parallel with the grid. BYD Coach & Bus will buy power from the system under a 25-year agreement once the project is completed this spring.

Apparent’s igOS™ is the key to unlocking an integrated total green solution – the sophisticated, real-time software identifies and signals to BYD’s battery system to charge during times of low demand and discharge during peak times. The project is estimated to allow BYD Coach & Bus to save over $100,000/annually in energy with the same upfront costs.

“We are very pleased to work with BYD to offer more intelligent energy solutions,” said Apparent President Jacqueline DeSouza. “Our energy platform offers dynamic real and reactive power production and sub-second communications and control — features no other clean energy solution can provide. The result is more efficient and environmentally-friendly energy production at lower costs.”

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.

© 2020 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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Brooks

Berkshire Hathaway’s Brooks Sports Sues Clothier Brooks Brothers

(BRK.A), (BRK.B)

Berkshire Hathaway’s Brooks Sports, Inc., a footwear, apparel and accessories company headquartered in Seattle, has filed a lawsuit against Brooks Brothers Group, Inc. in federal court for breach of contract, unfair competition and trademark infringement.

The lawsuit seeks to stop Brooks Brothers from using Brooks’ famous BROOKS trademark on its stores and products and prevent public confusion and dilution of the BROOKS mark by Brooks Brothers.
Brooks also seeks damages for Brooks Brothers’ unfair competition and breach of contract.

The two companies have coexisted for more than 100 years without consumer confusion due to their distinct product lines and trademarks. Brooks is known for athletic-inspired innovative footwear, apparel and accessories under its famous BROOKS mark while Brooks Brothers makes ready-to-wear fashion apparel and tailored business and formal wear under its BROOKS BROTHERS mark. To support this distinction, there is a coexistence trademark agreement between Brooks and Brooks Brothers dating back to 1980.

Brooks Brothers recently attempted to block Brooks from obtaining registrations for its BROOKS trademark in the United States and other countries, despite decades of unopposed use. Additionally, on December 30, 2019, Brooks Brothers filed new trademark applications to use BROOKS alone, without the word BROTHERS, on eight categories of goods, including clothing, sporting goods and accessories for athletics. Brooks Brothers is also marketing “athletic” footwear and “sneakers,” which are among the items on which Brooks Brothers seeks to use the BROOKS trademarks.

“For more than 100 years we’ve built a brand that consumers worldwide recognize and trust,” said Jim Weber, Brooks CEO. “We will aggressively protect our intellectual property and defend the investment that’s created our valuable brand.”

© 2020 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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GEICO Insurance

GEICO on Hiring Spree in Georgia

(BRK.A), (BRK.B)

GEICO’s Macon, Georgia regional office is looking to extend job offers to more than 500 Central Georgia residents in 2020.

There are full-time and part-time career opportunities in Claims, Salvage, Emergency Roadside Service, Customer Service and Sales. Recent college graduates and others looking to train for leadership positions are encouraged to apply for the Emerging Leaders Program or Management Development Program. No prior insurance experience is necessary; training, mentorship and support are provided to all new associates.

New associates will join Central Georgia’s largest private employer and GEICO’s largest regional operation. They will be welcomed onto a team with a proven track-record of success. Last year, nearly 40 percent of GEICO associates in Macon received promotions for their efforts to provide quality service to GEICO’s ever-growing policyholders.

GEICO associates are offered the Total Rewards Program, with a wide range of benefits, including a health benefits package, retirement and finance options and continuing education opportunities. In addition, associates can expect career growth opportunities and a friendly and supportive environment in which to develop and thrive.

GEICO also provides associates with many opportunities to be involved in their community. GEICO has been the biggest contributor to the United Way of Central Georgia for the past 14 years, and associates have been honored for their volunteer work at Bibb County Public Schools and Middle Georgia Community Food Bank.

© 2020 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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Precision Castparts

Berkshire Hathaway’s Precision Castparts Plans 737 Max Layoffs

(BRK.A), (BRK.B)

Berkshire Hathaway’s aerospace company Precision Castparts has given pink slips to 150 workers in Oregon.

The layoffs are due to the suspension production of Boeing’s 737 Max.

The company has positions across a broad swath of next-generation commercial platforms, including Boeing’s 737 MAX, 777X, 787, and Airbus’s A320neo and A350 XWB.

There is still no firm date on the resumption of production, however, the latest estimates stretch into the summer of 2020 with some deliveries running up to two years late.

© 2020 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 to Build Electric Forklift Facility in California

(BRK.A), (BRK.B)

China’s BYD has committed to building a new California facility for its rapidly growing electric forklift business.

The company will construct a 50,000-square-foot facility in Rancho Dominguez that will include office space, warehouse space and facilities for demos and training.

“This expansion will help us build and strengthen our relationships and give us an important opportunity to showcase the variety of top-notch material handling equipment built by BYD,” Terry Rains, director of BYD’s North American forklift division, said in a statement. “BYD has been revolutionizing the material handing market and our extraordinary technology turns the industry inside-out,” added Rains.

Globally, BYD has delivered more than 12,000 zero-emission electric trucks across all classes, and it expansion into product handling equipment, such as forklifts, are part of a diversified electric powered product line that includes cars, delivery trucks, batteries, and even monorails.

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.

© 2020 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
McLane

Susan Adzick Promoted to Chief Operating Officer of McLane Foodservice

(BRK.A), (BRK.B)

Berkshire Hathaway’s McLane Company, Inc., a leading supply chain services company providing grocery and foodservice solutions, announced that Susan Adzick has been promoted to executive vice president and chief operating officer of McLane Foodservice, and in July of this year, Adzick will transition to president of McLane Foodservice.

“Susan Adzick is an experienced supply chain industry executive who is well respected by all who know and work with her,” says Tom Zatina, current president of McLane Foodservice. “I have the utmost confidence in knowing Susan will be a steward of the values of our business and keep our company a great place to work, a great place to trade and a great place to invest.”

Since joining McLane Foodservice in 2000, Adzick has held various leadership positions including her most recent role as senior vice president of sales and strategic relationships, which she has held since 2018. She has worked to elevate the McLane Foodservice brand to higher visibility within the industry, grow market share with existing brands and add new customers in the casual dining and fast casual segments. Over the last few years, Adzick provided the strategic direction, business development and customer relationship management for the entire portfolio of McLane’s foodservice business.

Additionally, Adzick serves on the National Restaurant Association Board of Directors, National Restaurant Educational Foundation Board of Directors as vice chair, Restaurant Leadership Conference Advisory Council and served on the Women’s Foodservice Forum (WFF) Board of Directors as chair in 2018.

Prior to joining McLane Foodservice, Adzick worked with PepsiCo as vice president of operations before being promoted to senior vice president, national accounts. She holds a Bachelor of Science degree in Biomedical Engineering and MBA, both from Vanderbilt University.

“McLane Foodservice is positioned to support the supply chain needs of our strategic partners today and tomorrow,” says Adzick. “I’m excited about helping to further shape the future of our business.”

© 2020 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
BH Media Special Report

Special Report: Berkshire Hathaway to Make $1.3 Billion on Sale of Newspapers to Lee Enterprises

(BRK.A), (BRK.B)

Berkshire Hathaway’s sale of its BH Media newspaper empire to Lee Enterprises will get Warren Buffett and Berkshire out of the newspaper business, and the good news it won’t be at a loss. Berkshire Hathaway will make a bundle on the deal.

Berkshire is selling BH Media Group’s publications and The Buffalo News for $140 million in cash, and providing approximately $576 million in long-term financing to Lee at a 9% annual rate.

What’s more, Lee Enterprises will lease also the existing newspapers’ facilities from Berkshire, including assuming the maintenance and upkeep costs, giving Berkshire an additional long term revenue stream.

Anyone that worries about Berkshire’s ability to collect on its loan can take comfort that the deal actually strengthens Lee’s balance sheet.

The proceeds Lee receives from the Berkshire financing will be used to pay for the acquisition, refinance Lee’s approximately $400 million of existing debt, and provide enough cash on Lee’s balance sheet to allow for the termination of Lee’s existing revolving credit facility. The financing requires no fees, will result in approximately $5 million of interest rate savings on Lee’s refinanced debt annually.

The transaction is expected to drive an 87% increase in revenue for Lee Enterprises, a 40% increase in adjusted EBITDA and immediately reduce leverage to 3.4x before synergies. Based on Lee’s work managing BHMG publications over the last 18 months, Lee expects $20-25 million of anticipated annual revenue and cost synergies. As a result, Lee will benefit from a stronger financial profile and be positioned to de-lever more rapidly.

Subsequent to the deal closing, Berkshire Hathaway will be Lee’s sole lender, putting Berkshire in first position in case of default.

The deal will reduce Lee’s leverage from 3.5x to 3.4x, before any cost and revenue synergies. Lee has identified approximately $20-25 million of highly achievable annual synergies, including revenue synergies from the management of digital advertising and subscriber programs, and cost synergies, primarily from the reduction of administrative expenses. Lee expects to achieve the full synergy run-rate within 24 months of closing, which is expected in mid-March 2020, subject to customary regulatory approvals.

Lee Enterprises is a longtime favorite of Warren Buffett, and it has moved in and out of his portfolio at various points. Lee has managed BHMG’s publications since July 2018 under a management agreement, and Buffett was clearly positioning Berkshire to get out of the newspaper business, no matter how much affection he had for ink stained paper.

A Windfall for Berkshire

In the end, Berkshire gets out of a declining business that had negligible impact on its balance sheet, can look forward to $1.296 billion in interest payments on its loan to Lee, and another $80 million in lease payments for the 10 years of its lease agreement. There could be significantly more if those leases renew.

How does Buffett feel about it? Buffett said, “My partner Charlie Munger and I have known and admired the Lee organization for over 40 years. They have delivered exceptional performance managing BH Media’s newspapers and continue to outpace the industry in digital market share and revenue. We had zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry’s challenges. No organization is more committed to serving the vital role of high-quality local news, however delivered, as Lee. I am confident that our newspapers will be in the right hands going forward and I also am pleased to be deepening our long-term relationship with Lee through the financing agreement.”

Warren Buffett has built Berkshire Hathaway into a half-trillion-dollar conglomerate through acquisitions, but he’s not afraid to sell on occasion, especially when the deal means long term profits with no costs.

© 2020 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.