Company Perspectives

"Charlie Munger--my partner and Berkshire's vice chairman--and I run what has turned out to be a big business, one with 217,000 employees and annual revenues approaching $100 billion. We certainly didn't plan it that way. Charlie began as a lawyer, and I thought of myself as a security analyst. Sitting in those seats, we both grew skeptical about the ability of big entities of any type to function well. Size seems to make many organizations slow-thinking, resistant to change and smug. In Churchill's words: 'We shape our buildings, and afterwards our buildings shape us.' Here's a telling fact: Of the ten non-oil companies having the largest market capitalization in 1965--titans such as General Motors, Sears, DuPont and Eastman Kodak--only one made the 2006 list. In fairness, we've seen plenty of successes as well, some truly outstanding. There are many giant-company managers whom I greatly admire; Ken Chenault of American Express, Jeff Immelt of G.E. and Dick Kovacevich of Wells Fargo come quickly to mind. But I don't think I could do the management job they do. And I know I wouldn't enjoy many of the duties that come with their positions--meetings, speeches, foreign travel, the charity circuit and governmental relations. For me, Ronald Reagan had it right: 'It's probably true that hard work never killed anyone--but why take the chance?' So I've taken the easy route, just sitting back and working through great managers who run their own shows. My only tasks are to cheer them on, sculpt and harden our corporate culture, and make major capital-allocation decisions. Our managers have returned this trust by working hard and effectively."--Warren Buffett, chairman and chief executive officer

Key Dates
1888: Hathaway Manufacturing Company incorporates in Massachusetts.
1889: Berkshire Cotton Manufacturing Company incorporates in Massachusetts.
1929: Berkshire Cotton merges with four other textile manufacturers and changes its name to Berkshire Fine Spinning Associates.
1955: Berkshire Fine Spinning merges with Hathaway Manufacturing to form Berkshire Hathaway Inc.
1965: Partnership led by investor Warren Buffett purchases enough stock to control the company.
1967: Company enters the insurance business, buying National Indemnity Company and National Fire & Marine Insurance Company.
1968: Company acquires Sun Newspapers, a group of Omaha-area weeklies.
1969: Company buys Illinois National Bank & Trust Company.
1976: Berkshire Hathaway begins buying shares in GEICO (Government Employees Insurance Company).
1983: Berkshire Hathaway acquires Blue Chip Stamps and 90 percent of Nebraska Furniture Mart.
1985: Berkshire liquidates its original textile operations.
1986: Berkshire acquires Scott & Fetzer Company, owner of World Book and Childcraft encyclopedias as well as Kirby vacuums, for about $320 million.
1989: Company purchases 6.3 percent ($1 billion worth) of the Coca-Cola Company, making Berkshire Coke's second largest shareholder.
1995: Berkshire spends $2.3 billion to buy the remaining 50 percent of GEICO Corporation; Berkshire stock trades at $36,000 per share.
1996: As share price nears $36,000, the company issues $100 million in new Class "B" stock at one-30th the value of the original stock.
1998: Class "A" stock hits $84,000 a share; the company purchases General Reinsurance for $22 billion.
2000: Berkshire acquires 76 percent of MidAmerican Energy Holdings Company.
2002: Fruit of the Loom and The Pampered Chef are added to Berkshire's roster of subsidiary companies.
2006: Berkshire records a net worth gain of $16.9 billion, the most in U.S. business history, as shares of its Class A stock eclipse $100,000 in value.
2007: Berkshire invests more than $3 billion for a 10.9 percent interest in Burlington Northern Santa Fe.