On Auto Industry

Question: Your opinion on the auto industry? Buffett: [GM CEO] Rick Waggoner and [Ford Chairman] Bill Ford have both been handed, by past managers, extremely difficult hands to play. They’re not the consequences of their own doing, but they have inherited a legacy cost structure, with contracts put in place decades ago, that make it very difficult […]

On Soft Drink Industry

Question: In the domestic soft drink model, is it winner take all, or is there room for three competitors? Buffett: Sure, there’s room for more than one. I think Coke’s market share will grow pretty much year after year. We’re talking tenths of a percent, but tenths of a percent are important. The U.S. market […]

On Airline Industry

Question: What do you think of the airline industry? Buffett: “The big problem is not aggregate costs, but costs versus competitors.” Buffett recalled US Air’s difficulties competing against Southwest and concluded, “If your costs are out of line, you’re going to get killed eventually.” [Munger: “Airline pilot unions are really tough. It’s interesting to see people paid […]

On Health Care Industry

Question: Opinion on the healthcare industry and its costs? Buffett: We looked at healthcare costs, which were exploding a few years ago. Workman’s Comp costs have risen dramatically, and are huge for us. $6,000-$7,000 per employee. That’s in inflationary part of the US economy and we and our employees can’t control it. Health costs will […]

Who Really Cooks the Books?

By Warren E. Buffett Published: July 24, 2002 There is a crisis of confidence today about corporate earnings reports and the credibility of chief executives. And it’s justified. For many years, I’ve had little confidence in the earnings numbers reported by most corporations. I’m not talking about Enron and WorldCom — examples of outright crookedness. […]