Eastern Railroad Discussion > Buffett, Rose: Probably no large mergers for a while

I'm surprised this hasn't been mentioned.  Berkshire is having its annual Woodstock for Capitalists, where share owners and the Oracle drink Coke, eat See's Candy, and have a steak at Gorat's. They also talk a little business.

The question of CP's attempt to consolidate NS came up.  The Journal reports on the reply

Mr. Buffett punts to Matt Rose, who runs Berkshire’s BNSF railroad. Mr. Rose says that because of the regulatory tenor of recent years, “we didn’t really think a large merger was possible.” He predicts that it won’t happen until the U.S. population is larger. That will cause transportation to become more scarce and railroads will need to do more, and will force them to drive efficiency through mergers.

The questions usually tend to be general, as are the answers. But, it's not unlikely that BNSF's strategic team and their bankers are keeping tabs on their competitors, partners, short line operators, and others to monitor all their options.

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Later in the report, the leaders are asked about the "ruthless cost cutting" practiced by their partner 3G. That firm is the lead partner of the Kraft/Heinz investment, and has been criticized by outsiders for its aggressive methods.  Buffett has been sensitive on this topic in the past, preferring to burnish his Uncle Warren persona.  Last year saw a lot of push back on plant closings, layoffs, forced give backs, etc.

Mr. Buffett has lauded 3G and its leaders, saying the cuts they make are necessary. That continued today: “The 3G, in terms of the cost cuts that they’ve made, have been extremely intelligent about it.”



Edited 1 time(s). Last edit at 04/30/16 19:52 by Lackawanna484.