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 […]

Buffett on Good Businesses

By Warren Buffett This article is an excerpt from Warren Buffett’s Letter to Berkshire Shareholders, 1987 Gypsy Rose Lee announced on one of her later birthdays: “I have everything I had last year; it’s just that it’s all two inches lower.” As the table shows, during 1987 almost all of our businesses aged in a more upbeat way. […]

Buffett on Railroad Industry

[Q: What are your views on the railroad industry?] I don’t think the railroad industry will be a lot more exciting, but the competitive position of the railroads has improved somewhat since 20 years ago. There’s been progress on labor issues and an improved competitive position vis-a-vis truckers. Higher oil prices hurt railroads, but hurt […]

Buffett on Newspaper Industry

[Q – Are you still down on newspapers? Ipad and other e-reading technologies – will it end up with contraction in earnings retained by content provider or by distributor?] WB: When money at newspapers came from advertising – it was on average about 75%, they used to be only game in town, and what a […]