YOUR MONEY

The new Warren Buffett

 I have long be an admirer of Warren Buffett.  

 He is not only one of the wealthiest people on the planet but has kept to his Midwest roots still living in his decades old  Omaha, Nebraska home, and has pledged 99% of his estate to charity. 

 

He has been the model investor looking to the long term and modest growth, in diverse companies that are key to the well being of the US.  economy and future.

 

There was a saying “What's good for General Motors is good for the U.S.A.” That was true for the 1950s and 1960s when GM dominated the car and truck business and directly and indirectly produced thousands of well paying jobs and supported local businesses around the country.

I have felt the same about Warren Buffett and his company Berkshire Hathaway:  "What's good for Warren Buffett is good to the U S.A.”

But in the last few years a new and different Buffett has emerged. Buffett has gone on a buying spree gobbling up one American icon after another such as Wrigley, Mars candy, Heinz and Kraft with the backing of money from Brazilian private-equity firm 3G Capital; and G3 now owns Burger King and Tim Hortons as well.

In the name of right-sizing and rationalization, Buffett has closed the Heinz plant by Leamington, Ontario, the tomato capital of Canada, enduing a 105 year operation that employed 740 workers; with the stroke of a pen putting this one-industry  community  on the dole and replacing Canadian tomatoes and jobs with Mexican tomatoes and cheaper labour.

More recently, some 700 administrative jobs have been eliminated due to the merging of Heinz-Kraft.

And this month Buffett has paid an astounding US $32.3 billion for aerospace Precision Castparts, the largest single acquisition in the history of  Berkshire Hathaway.

Put simply, the new Buffett works fast and with daring boldness and between rightsizing, synergy efficiencies and the like, he looks more like Albert John Dunlap, nicknamed Chainsaw Al. 

 

What the ledger of profit and loss will show in years to come or how history will judge Warren Buffet I do not know, but for the moment it is a sad day in Mudville.