Berkshire News Briefs - 12/31/14

Ocwen Would Do Well to Follow the Lessons of Berkshire’s Clayton Homes (NY Times)

On the surface, it's a story about Ocwen Financial Corp's struggles, but really it's an extensive story singing the praises of Berkshire subsidiary Clayton Homes's business practices.

Though Clayton also concentrates in subprime loans, it has had an entirely different track record, prospering throughout the financial crisis. It had no increase in customer foreclosure rates. It met all its obligations as a lender, borrower and servicer. And it even acquired several failed competitors to move to No. 1 in its segment from No. 4. [...] What distinguished Clayton Homes was that its financing division, unlike that of competitors, did not engage in predatory lending or exploit its customers’ naiveté. Mr. Clayton attributed the difference to his company’s maintenance of a “sacred wall” between sales and credit that competitors failed to maintain.

Buffett’s DQ bringing soft-serve treats back to Kuwait (Gulf Times)

International Dairy Queen, the fast-food and ice-cream seller owned by Warren Buffett’s Berkshire Hathaway Inc, is bringing its American-style meals and treats back to Kuwait after an absence of more than a decade. More than 20 locations will open in the country in the next five years, Minneapolis-based Dairy Queen said in a December 23 statement announcing a new franchise agreement. Four to five may begin operations in 2015, Brad Houser, vice president of international development, said in a phone interview. [...] Most food and treats offered in Kuwait will be the same as those on US menus, Houser said. One item unique to the Middle East is the beef kofta, a spicier, gyro-type sandwich. Of the chain’s more than 6,300 locations, about 22% are outside of the US and Canada, about 2 percentage points more than in January.

Railroads, unions to begin collective bargaining talks next month (Omaha World Herald)

Labor negotiations are set to begin between Union Pacific, BNSF Railway and unions that represent about 10,000 railroad workers in Nebraska and Iowa. Formal negotiations are scheduled for next month on a new collective bargaining agreement between the nation’s freight railroads and 13 unions representing about 143,000 workers. The most recent contracts were ratified in 2011 and 2012. Key to the talks will be compensation, health care costs and work rules that describe who is allowed to do what on trains and in rail yards, workshops and offices, according to bargaining notices sent to the unions by the railroads.

Zawawi Minerals' firms now part of Warren Buffett's investment (Zawya)

Not really a "Buffett" investment, but it makes a good headline overseas as businesses are eager to promote themselves as connected to Buffett.

USG Corporation, through its 50:50 joint venture USG-Boral Building Products, is a shareholder in Zawawi Gypsum LLC and USG -- Zawawi Drywall SFZ LLC, which are at the forefront of efforts to create In Country Value for the Sultanate's prodigious gypsum resources. Both firms are subsidiaries of Zawawi Minerals LLC , a prominent player in Oman's rapidly expanding mining sector," said Alawi Zawawi, Chairman of Zawawi Minerals LLC. [...] Berkshire Hathaway's 30.50 per cent stake in USG Corporation effectively gives the US investment conglomerate an indirect shareholding interest in the two Omani firms, amounting to 8.39 per cent in Zawawi Gypsum LLC and 7.63 per cent in USG-Zawawi Drywall SFZ LLC. In essence, the two companies are now part of Warren Buffett's holding company which today ranks as the fifth most valuable public enterprise in the United States, with a market cap of nearly $350 billion.

NetJets adds 10 Signature Series Phenom 300s to Embraer aircraft order (CNN / PRNewswire)

Embraer Executive Jets and NetJets® Inc., a Berkshire Hathaway company and the worldwide leader in private aviation, have signed an agreement to convert 10 Signature Series Phenom 300 purchase options into firm orders. At current list prices, this addition to the contract is worth US$ 89.55 million, which will be included in the backlog of the fourth quarter of 2014. In October 2010, a purchase agreement was signed for 50 firm and 75 options. The total value of the deal may exceed US$ 1 billion, if all options are exercised. [...] Embraer has now delivered 36 Signature Series Phenom 300s to NetJets. These aircraft operate in the NetJets fleet, with fractional owners in the U.S. and Europe. Deliveries of the 10 additional aircraft will begin as of January 2016.