Author Topic: Buffett/Berkshire - general news  (Read 490921 times)

WneverLOSE

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Re: Buffett/Berkshire - general news
« Reply #480 on: June 11, 2017, 02:43:29 AM »
"Warren Buffett's 31 Berkshire Hathaway Automotive dealerships in Texas face an uncertain future after the state Legislature failed to take action to make them legal."
http://www.autonews.com/article/20170605/RETAIL07/170609924/1400

not that it will have any needle moving impact on anyone but maybe that's why some due diligence and lawyers may be useful ?


John Hjorth

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Re: Buffett/Berkshire - general news
« Reply #481 on: June 11, 2017, 05:00:33 AM »
Just to give some perspective to the post by WneverLOOSE. From the 2015Q1 interim report :

Quote
In the first quarter of 2015, Berkshire acquired controlling interest of the Van Tuyl Group. The Van Tuyl Group (now named Bekshire Hathaway Automotive) includes 81 automotive dealerships located in 10 states as well as two related insurance businesses, two auto ucations and a manufacturer of automotive fluid maintenance products. In addition to selling new and pre-owned automobiles, the Berkshire Hathaway Automotive group offers repair and other services and products, including extended warranty services and other automotive protection plans.

So, as WneverLoose wrote, this will not move the needle as such for Berkshire, but certainly for the Van Tuyl aquisition, this might be considered something material, that has skipped the attention of the involved parties.

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It's beyond my comprehention, why there in Texas is legal protection of car dealerships against competition from car producers trying to compete by selling cars B2C.
« Last Edit: June 11, 2017, 05:11:19 AM by John Hjorth »
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longinvestor

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Re: Buffett/Berkshire - general news
« Reply #482 on: June 11, 2017, 11:39:24 AM »
Just to give some perspective to the post by WneverLOOSE. From the 2015Q1 interim report :

Quote
In the first quarter of 2015, Berkshire acquired controlling interest of the Van Tuyl Group. The Van Tuyl Group (now named Bekshire Hathaway Automotive) includes 81 automotive dealerships located in 10 states as well as two related insurance businesses, two auto ucations and a manufacturer of automotive fluid maintenance products. In addition to selling new and pre-owned automobiles, the Berkshire Hathaway Automotive group offers repair and other services and products, including extended warranty services and other automotive protection plans.

So, as WneverLoose wrote, this will not move the needle as such for Berkshire, but certainly for the Van Tuyl aquisition, this might be considered something material, that has skipped the attention of the involved parties.

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It's beyond my comprehention, why there in Texas is legal protection of car dealerships against competition from car producers trying to compete by selling cars B2C.

So a big parent cannot own both a "vehicle" maker and sell other things on wheels? Is this Texas or the Soviet Union?

bizaro86

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Re: Buffett/Berkshire - general news
« Reply #483 on: June 11, 2017, 07:15:47 PM »
That law is obviously asinine, but this popped out at me from the article.
"The Legislature adjourned May 31 without taking further action. It’s not scheduled to reconvene until January 2019" emphasis added by me.

Sounds like being a Texas legislator is nice work if you can get it...

gfp

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Re: Buffett/Berkshire - general news
« Reply #484 on: June 11, 2017, 07:50:17 PM »
I knew someone who worked for Rick Perry a few years ago in Texas Government.  I was surprised to learn from him that being a Texas legislator is not a full time job.  This article mentions that it is not much of a paying gig either, kind of like serving on the Berkshire board of directors.  I think Berkshire will be fine in Texas - Buffett met with the governor and the Berkshire bill was fast tracked into the legislature, where it just stalled out and disappeared.  I would expect that the investigation will find that Berkshire is not in violation of the Texas law (more of an anti-Tesla model law) because they don't find that manufacturing RVs is an issue for an owner of auto dealers.  If they were going to have an issue with it, they would have taken care of the 'Berkshire bill' that was specifically intended to carve out an exception for Berkshire's situation.  Buffett has a bit of pull in Texas, and he isn't hurting anyone.

https://www.dallasnews.com/news/local-politics/2015/02/16/texas-every-two-year-legislature-isnt-so-part-time

That law is obviously asinine, but this popped out at me from the article.
"The Legislature adjourned May 31 without taking further action. It’s not scheduled to reconvene until January 2019" emphasis added by me.

Sounds like being a Texas legislator is nice work if you can get it...

WneverLOSE

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Re: Buffett/Berkshire - general news
« Reply #485 on: June 13, 2017, 01:28:33 PM »
Quote
Berkshire Hathaway Inc.’s auto dealerships and recreational-vehicle manufacturer have violated Texas regulations and should lose their licenses, the enforcement division of the state’s Department of Motor Vehicles concluded.
https://www.wsj.com/articles/berkshire-dealerships-and-rv-maker-broke-texas-law-regulator-says-1497379828?mod=nwsrl_heard_on_the_street

There is no way in hell this will happen but the hole fiasco around it is kind of insane.
nobody wants them to stop selling cars in Texas so why even bother with all the legal stuff ? just mail them "Hi, you broke the law but it ok, here is your permit to do so, have a good day Warren" and finish with it. I really hope Warren will not accept the stupid penalty and tell them he will close those dealerships and layoff 4,200 workers and that Texas will lose 220m a year of taxes. We will see how firm are they on those penalties.

John Hjorth

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Re: Buffett/Berkshire - general news
« Reply #486 on: June 13, 2017, 02:23:31 PM »
Quote
Berkshire Hathaway Inc.’s auto dealerships and recreational-vehicle manufacturer have violated Texas regulations and should lose their licenses, the enforcement division of the state’s Department of Motor Vehicles concluded.
https://www.wsj.com/articles/berkshire-dealerships-and-rv-maker-broke-texas-law-regulator-says-1497379828?mod=nwsrl_heard_on_the_street

There is no way in hell this will happen but the hole fiasco around it is kind of insane.
nobody wants them to stop selling cars in Texas so why even bother with all the legal stuff ? just mail them "Hi, you broke the law but it ok, here is your permit to do so, have a good day Warren" and finish with it. I really hope Warren will not accept the stupid penalty and tell them he will close those dealerships and layoff 4,200 workers and that Texas will lose 220m a year of taxes. We will see how firm are they on those penalties.

If it comes to that extreme eventually, Berkshire will just sell those Texas dealerships again, like what happened with about 2 km railroad at BNSF a few years ago.
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rb

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Re: Buffett/Berkshire - general news
« Reply #487 on: June 13, 2017, 02:44:55 PM »
Quote
Berkshire Hathaway Inc.’s auto dealerships and recreational-vehicle manufacturer have violated Texas regulations and should lose their licenses, the enforcement division of the state’s Department of Motor Vehicles concluded.
https://www.wsj.com/articles/berkshire-dealerships-and-rv-maker-broke-texas-law-regulator-says-1497379828?mod=nwsrl_heard_on_the_street

There is no way in hell this will happen but the hole fiasco around it is kind of insane.
nobody wants them to stop selling cars in Texas so why even bother with all the legal stuff ? just mail them "Hi, you broke the law but it ok, here is your permit to do so, have a good day Warren" and finish with it. I really hope Warren will not accept the stupid penalty and tell them he will close those dealerships and layoff 4,200 workers and that Texas will lose 220m a year of taxes. We will see how firm are they on those penalties.

If it comes to that extreme eventually, Berkshire will just sell those Texas dealerships again, like what happened with about 2 km railroad at BNSF a few years ago.
John, I know you've expressed some dismay and confusion at the Taxas law a while back. I didn't have time to respond at that point so I will now and maybe you get a better flavour of what's going on.

Basically these laws are all over America. They are very old. They date to a time when there were hundreds of car manufacturers. The reason they were enacted was for warranty. Basically there was a much greater change for the auto retailer to be in business than the auto manufacturer 3-5 years from purchase. Of course that is not the case anymore and everyone mostly forgot that these laws exists.

However these laws came back to front recently because of Tesla and their direct to consumer model. Auto dealers started putting pressure on governments to enforce the laws against Tesla. A number of states rightly pulled back on those laws but some other notably Texas and New Jersey are holding very firm on those laws in order to bar Tesla.

There is poetic justice in the fact that a law that dealership special interests pushed governments to enforce against Tesla ends up biting dealerships.

John Hjorth

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Re: Buffett/Berkshire - general news
« Reply #488 on: June 13, 2017, 02:59:18 PM »
Thank you for sharing your knowledge with a past and present perspective here, rb. It is very much appreciated.

In that perspective, it makes a least some kind of sense.

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« Last Edit: June 13, 2017, 03:02:36 PM by John Hjorth »
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WneverLOSE

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Re: Buffett/Berkshire - general news
« Reply #489 on: June 14, 2017, 03:44:41 AM »
Quote
There is poetic justice in the fact that a law that dealership special interests pushed governments to enforce against Tesla ends up biting dealerships.

tbh it benefits dealerships, but Berkshire is suffering. I own a bit of AutoNation, I will be happy to take those dealerships off Warren's hands for a small wholesale discount :)
(by the way those are the best dealerships out there, making more than 120m per location)