Omaha, Neb., became a worldwide business epicenter over the weekend. Its oracle spoke.
Warren Buffett held his annual Berkshire Hathaway shareholder extravaganza in Omaha. He spoke in the Qwest Center to some 40,000 investors, and afterward held a press conference to trumpet his message: Business is better.
As Bloomberg reported, the 79-year-old billionaire said, “Unemployment is going to come down. Business is picking up. We at Berkshire are hiring now. We let go a lot of people last year. American business is improving from everything I can see now.”
Berkshire posted a $3.6 billion profit for the first quarter, compared to a $1.5 billion loss for the same time last year.
Here’s the kicker. One of the brighter spots in Berkshire’s financials happened to be in manufacturing. Cutting-tool maker Iscar Metalworking Cos. reported positive news, as did the other companies under the Berkshire umbrella. They include Marmon Holdings Inc., a company of more than 100 businesses, a few being metal fabricators such as retail displays-maker L.A. Darling Co. and truck component manufacturer Fleetline Products. Quarterly profit from Berkshire’s manufacturing, service, and retailing jumped 85 percent, to $477 million, from $258 million in 2009.
People view Berkshire Hathaway as a harbinger for a reason. The holding company is a microcosm of global business. And Buffett continues to be upbeat about manufacturing. The more we produce here, the more important regional transportation will be, and it’s here where Buffett’s newly acquired BNSF (Burlington Northern-Santa Fe) railroad may come in handy.
Indeed, he said that manufacturing is driving the recovery. He said this a day before the Institute for Supply Management released its manufacturing report for April—its index rose from 59.6 to 60.4.
There have been questions about Buffett’s business philosophy. As one who looked down on Wall Street’s wild ways, he certainly has a softer tone these days. He defended Goldman Sachs’ business practices, specifically the Abacus mortgage investment fund, while at the same time reporting Berkshire’s gain of $1.4 billion in derivatives and investments.
It seems Berkshire’s business dealings are getting as complicated as the overall economy. But despite the complexity, Buffett knows how to make a buck—probably more than anyone on the planet. And he’s bullish on manufacturing. For metal fabricators, that can’t be a bad thing.