Berkshire News Briefs - 9/25/13

Berkshire Hathaway Enters Detroit Bankruptcy Case (Bond Buyer)

Warren Buffett's bond insurance firm made its first appearance in the Detroit bankruptcy case with a brief court paper filed Saturday. [...] Attorneys for Buffet's Berkshire Hathaway Assurance Corp. on Saturday filed a court notice of appearance and request for service. [...] BHAC has about $400 million in exposure to Detroit's debt, mostly in sewer revenue bonds. All the BHAC insurance is a wrap on top of an original guarantee from Financial Guaranty Insurance Co. In addition to $384 million of sewer debt, the insurer also wraps a piece of the city's defaulted pension certificates, though the amount is uncertain.

Colorado Properties joins Berkshire Hathaway HomeServices (Vail Daily)

Berkshire Hathaway HomeServices, the new real estate brokerage network operated by HSF Affiliates LLC, announced on Monday that Colorado Properties is the network’s first resort-brokerage signee. Colorado Properties will begin operating as Berkshire Hathaway HomeServices Colorado Properties in October. [...] Colorado Properties, a full-service brokerage founded in 1971, operates six offices with 85 sales professionals and one of the area’s largest vacation rental companies. The company ranks among Prudential Real Estate’s Top 50 companies nationwide and is a top firm in the Vail Valley.

Prudential California Realty Becomes Berkshire Hathaway HomeServices California Properties (San Diego Business Journal)

Prudential California Realty became the first company to operate as a member of the new Berkshire Hathaway HomeServices network, and was renamed Berkshire Hathaway HomeServices California Properties, the company said. [...] Berkshire Hathaway HomeSevices California Properties has about 3,200 sales associates in 62 offices in Southern California and the Central Coast. It is one of the top five brokerages in the nation, the company said. Last year its agents closed nearly $11 billion in sales and more than 14,000 transactions.

Air Force Contracts Worth $97 Million Awarded Monday (Fool)

$19.9 million: going to Berkshire Hathaway subsidiary FlightSafety Services Corp to exercise a seventh option year on a contract to support Aircrew Training Systems for the McDonnell Douglas KC-10 aerial refueling tanker. FlightSafety will be both supplying and supporting all KC-10 training devices used in the Air Force's Operation and Training System Support Center through Sept. 30, 2014.

Rail Traffic Reaches Record Level (Seeking Alpha)

Total N. American rail traffic last week leaped to the highest levels in the 5 years I began tracking the series here. At 733k carloads it passed the previous highs despite both oil/chemical shipments and coal shipments falling slightly. Strength was seen in intermodal, auto, metals and stone products. The metal and stone product categories sit at or just below multi year record levels. [...] As for the carriers, Burlington Northern [merged with Berkshire Hathaway and Canadian National Railway Company saw their traffic also reach the highest level since I began tracking the series.

Buffett’s 9% Heinz Dividend Means 3G Cutting Jobs, Mini-Fridges (Bloomberg)

Since taking over at the Pittsburgh-based ketchup maker, Hees eliminated hundreds of jobs, grounded corporate jets and pulled the plug on mini-fridges at the office. Savings will help pay down $12.6 billion in borrowing supporting the deal. [...] The management turnover contrasts with Berkshire’s normal approach. When Buffett buys a company, he typically leaves senior employees in place and commits to holding the business forever. The practice makes Berkshire a buyer of choice for many sellers, he’s said.

Warren Buffett Offering Options For MN’s Famous Dairy Queen Manager (WCCO 4 Minnesota)

Joey Prusak saw a woman steal $20 from a blind customer at the Dairy Queen where he works. So he gave the guy his own cash. [...] “Warren Buffet called me this morning and we talked for about 10 minutes,” Prusak said. One of the world’s richest people was calling over a $20 bill. “I go, ‘What I would like to know is why you’re calling here?’ He goes ‘I just wanted to call and thank you for all that you did. It means a lot to me,’” Prusak said. Buffet’s company owns Dairy Queen, and Buffett said he’s planning future talks with Prusak.

Berkshire News Briefs - 9/15/13

AIG Said to Opt Against Buffett Reinsurance Amid Clash (Bloomberg)

American International Group Inc. (AIG) has decided against signing new reinsurance contracts with Berkshire Hathaway Inc. after Warren Buffett’s company started a commercial insurer competing against AIG, according to a person with knowledge of the decision. [...] Buffett said in May he was planning to add sales of commercial insurance after hiring executives from AIG including Peter Eastwood, who ran the company’s property-casualty operation in the Americas. The move challenges New York-based AIG in one of its main markets and expands Berkshire beyond its strengths in U.S. personal auto coverage and reinsurance.

Berkshire ‘A’ Shares, Soon Available In Pennies (WSJ)

Starting Sept. 16, the New York Stock Exchange plans to begin trading and quoting Berkshire Hathaway Inc. in pennies, according to a Thursday notice from the exchange. That means that the stock’s mammoth price – $168,180 on Thursday afternoon – will move in one-cent increments, rather than the current ten cents.

Improved Underwriting Results Boost RAA Companies' 1H Net Income (Property Casualty 360)

A group of 18 reinsurers belonging to the Reinsurance Association of America reported a combined 2013 first-half net income of just under $4.8 billion, up from $3.6 billion for the same companies a year ago, as improved underwriting income more than offset a slight drop in net premiums written. Similar to 2012’s first half, Berkshire Hathaway’s National Indemnity Co. accounted for over half of the group’s net income in the first six months of this year. National Indemnity reported just under $3 billion in first-half net income, far outpacing Transatlantic Reinsurance, which placed second among the group with $364.4 million in net income.

U.S. judge approves $72 mln fraud pact with Berkshire's Gen Re (Reuters)

A U.S. judge on Tuesday approved a $72 million settlement by Berkshire Hathaway Inc's General Re Corp to resolve claims that it engaged in a sham deal that helped fraudulently inflate American International Group Inc's loss reserves. The settlement's approval brings to an end nine years of shareholder litigation revolving around AIG accounting practices dating to 1999.

Shaw Industries opens carpet tile plant in China (Fibre 2 Fashion)

Berkshire Hathaway’s Shaw Industries Group, Inc. (Shaw) has announced its grand opening of a 210,000-square-foot carpet tile plant in Nantong, China – a port city 65 miles north of Shanghai. This facility offers customers in Asia quicker access to a wider range of completely recyclable, Cradle-to-Cradle-certified products, which are PVC-free and bitumen-free. [...] Expected to employ approximately 250 at full capacity, over 100 Shaw associates are onboard at this time. [...] Products manufactured in China will be sold for installation in the growing Asia market and there are no plans to export them back to the U.S.

SidePlate’s Active Projects More Than Double in 36 Months (Herald Online)

SidePlate®, a Berkshire Hathaway company that designs innovative steel building connections, today announced that it has doubled its employee base in the last 36 months to accommodate rising demand for its consulting and project-management services. As another indicator of the Company’s dramatic growth, SidePlate’s active projects have more than doubled since July 2010. [...] In 2009, Berkshire Hathaway’s MiTek® acquired SidePlate because of the Company’s sterling reputation, its innovative consulting services and technology, and its potential for the very growth that SidePlate is experiencing today.

Truss and Wall-Panel Component Manufacturers Stand Ready to Respond to Framing Labor Shortage (Herald Online)

“Housing starts are showing sustained growth, and they are predicted to spike to a run rate of 1.3 million by the end of 2014, and 1.5 million in 2015,” said MiTek’s Gregg Renner. “That’s good news, but it also indicates that the framing labor shortage won’t ease, and builders need a different approach to framing houses. That’s what MiTek’s component manufacturers offer.”

Berkshire’s Richline Makes Jewelry Deal With American Greetings (Bloomberg)

Richline Group Inc., owned by Warren Buffett’s Berkshire Hathaway Inc., reached a deal to make and distribute jewelry featuring the artwork from cards produced by American Greetings Corp. [...] Richline also has relationships with the Marie Claire brand and the National Football League.

Borsheims to open second location at Nebraska Crossing Outlets (Omaha World-Herald)

For more than a half-century, Borsheims, Omaha's iconic jeweler, has limited itself to a single store. But this fall the Berkshire Hathaway-owned retailer will break tradition and open a second location — an outlet store at Nebraska Crossing Outlets in Gretna. The outlet store, opening Nov. 15 under the banner Borsheims Boutique, will occupy a 5,500-square-foot space next to the Coach factory store.

BNSF to spend $110 million on projects in Nebraska (Omaha World-Herald)

BNSF Railway Co. on Thursday announced plans to invest about $110 million this year in maintenance and rail capacity expansion projects in Nebraska. [...] BNSF also plans to invest $35 million this year in Iowa, which is part of the railroad’s total 2013 capital investment of $4.3 billion, a record for the company. [...] Omaha-based Union Pacific’s 2013 capital investment numbers aren’t yet available, but last year the company spent about $303 million in Nebraska and $3.7 billion total on its network.

Berkshire Hathaway HomeServices Signs Nine More Affiliates (Fort Mill Times)

Berkshire Hathaway HomeServices, the new real estate brokerage network operated by HSF Affiliates LLC, today announced the signing of nine more brokerage companies for the network. The companies include: Prudential Anderson Properties, Houston, TX; Prudential California Realty, Cerritos, CA; Prudential Canyon Lake Realty, Canyon Lake, CA; Prudential Gallo, REALTORS®, Rehoboth Beach, DE; Prudential Serls Prime Properties, Lagrangeville, NY; Prudential Southeast Coastal Properties, Savannah, GA; Prudential Texas Realty, Austin, TX; Prudential Tropical Realty, Tampa Bay, FL; and Prudential Woodmont Realty, Nashville, TN. The brokerages will begin operating under the Berkshire Hathaway HomeServices flag as early as the fourth quarter of 2013. They are the latest in a series of brokerage signees announced by the new real estate network, whose total members now represent more than $1 billion in annual gross commission income.

Berkshire News Briefs - 9/3/13

It's an all-subsidiary news edition!

Top CEO - Strategic Management - Randy Watson of Justin Boots (Fort Worth Business Press)

By the time Watson realized that he “wasn’t good enough” for professional baseball, his part-time job hadbecome his new passion – one that he pursued to the executive boardroom of Fort Worth-based Justin Brands Inc., a recognized leader in Western footwear. Watson said the competitive and team spirit he learned playing football and baseball helped him succeed in the business world. It also led Ernst & Young to select the Justin CEO as its 2013 Southwest-north Entrepreneur of the Year in manufacturing and distribution. [...] Buffett reiterated his description of Watson as “the prototype Berkshire Hathaway manager” when he promoted him to CEO and board chairman of Justin Brands in 2011.

Forest River and Thor in a Mid-Year ‘Dead Heat’ (RV Business)

For the first time in memory, the industry’s two RV-building volume leaders, Thor Industries Inc. and Forest River Inc., are in a dead heat for retail market share in both towable and motorized RVs [...] But the real news here is to what extent Forest River is pressing its case in both towable and motorized RVs, even while both companies continue to post impressive growth during the current economic recovery. Thor, for its part, recently posted its first $2 billion quarter, and revenues for Forest River, a Berkshire Hathaway Inc. subsidiary, were running at least 22% ahead of last year through June, Forest River President and CEO Pete Liegl confirms.

New planes, reduced competition help NetJets’ earnings (Columbus Dispatch)

Business at Columbus-based NetJets continues to strengthen, according to the latest report of parent company Berkshire Hathaway. The second-quarter earnings news from the company led by billionaire Warren Buffett shows that, in the first six months of this year, NetJets “experienced increased sales of fractional aircraft shares and its earnings increased primarily due to improved flight-operations margins, fractional-sales margins and reduced net financing costs.”Observers say the new planes being added to its fleet and diminished competition in its industry have helped.

Shaw Industries to build plant, add 500 employees (Chattanooga Times Free Press)

Shaw Industries is vacuuming up talent in North Georgia for a new plant that will churn out carpet tile across the U.S., the company announced today. The Dalton, Ga.-based business, which is owned by Omaha billionaire Warren Buffett, will spend $85 million and create 500 new jobs at a new plant in Adairsville designed to meet growing demand for Shaw's soft wares. It will be the seventh facility for Shaw in Bartow County, where it is already the biggest employer. "I think our business has turned," said Vance Bell, CEO of Shaw. "Carpet tile today is well over 50 percent of our commercial carpet mix and continues to grow, and it's just received a very good audience in the commercial marketplace."

XTRA adds free tracking service for leased trailers (Fleet Owner)

Basic trailer tracking service at no charge is now being offered to fleets on new long-term leased trailers from XTRA Lease, the company said. XTRA Lease noted its offered basic trailer tracking on dry van rentals for free but is now upping the ante to include such basic tracking service at no extra cost on all newly leased dry vans and late model reefers, model-year 2010 and newer. The services will enable fleets to view current and historical trailer locations, “drill down” into dormancy and usage data utilization info to better understand how trailers are being used, as well as provide e-mail subscription reports offering the latest location and dormancy information on those leased units.

Berkshire Hathaway’s FlightSafety adds Cessna simulator in San Antonio (San Antonio Business Journal)

New York-based FlightSafety International has added new Cessna Aircraft Co. training simulators in San Antonio and two other U.S. locations. FlightSafety — a division of Warren Buffet’s Berkshire Hathaway Inc. — now offers simulator training for the Citation CJ2+ aircraft at its Alamo City learning center. It is the only dedicated CJ2+ simulator worldwide, company officials say.

Buffett's See's Candies has sour day: Chocolates recalled (CNBC)

San Francisco-based See's Candies is recalling all its Dark Chocolate Blueberries because the product contains undeclared milk, the company said in a press release that was posted on the Food and Drug Administration website. The recall was initiated after a customer reported having an allergic reaction to the product, the statement said.

Dairy Queen Sets World Record With Fruit Sculpture (CBS 4 Minnesota)

Dairy Queen now owns the world record for the largest fruit sculpture ever after hiring an artist to build a 10-foot-tall tree. The restaurant chain sponsored the fruit sculpture in Calgary, Alberta, Canada earlier this month as part of a promotional event for its Orange Julius smoothies. Sculptor Shawn Feeney used 1,200 pieces of pineapples, oranges, strawberries, peaches and mangos to build the tree.