Tuesday, December 22, 2009

BNSF: "Buffett Says of Railroad, ‘I’d Rather Be in the West’" (BNI; BRK.A)

From Bloomberg:
Billionaire Warren Buffett, chairman of Berkshire Hathaway Inc., told employees of Burlington Northern Santa Fe Corp. that he’s buying the railroad because of its position in the U.S. West.

“I think the West is going to do well,” Buffett told workers of Burlington Northern during an in-house interview with the railroad’s chief executive officer, Matthew Rose. “I’d rather be in the West than the East.”

The $26 billion purchase of Fort Worth, Texas-based Burlington Northern is the biggest of Buffett’s career, and what he called an “all-in wager” on the U.S. economy. Burlington stands to benefit from an increase in shipments of goods from the U.S.’s Asian trading partners, including China.

“I think I know how the country is going to develop,” Buffett, 79, said in the interview, which was posted in a video on Burlington Northern’s intranet and distributed yesterday in a regulatory filing as a transcript.

Buffett divested Berkshire’s equity stakes in two competing railroads, Omaha, Nebraska-based Union Pacific Corp. and Norfolk Southern Corp. of Norfolk, Virginia, as part of the Burlington Northern transaction, he has said. The two companies are “good investments,” and Berkshire would have continued to own the stakes if the Burlington Northern takeover didn’t happen, Buffett said in an interview with Charlie Rose broadcast in November on PBS.

‘Good Business’

“We want Union Pacific to do well, too,” Buffett told the Burlington Northern workers. “There’s going to be four big railroads that are moving around more and more goods. So it’s, it’s a good business.” CSX Corp., the other railroad among the four largest in the U.S., is based in Jacksonville, Florida.

China ran up a record $266 billion trade surplus with the U.S. last year. China, the second-largest U.S. trading partner after Canada, may boost exports by 20 percent in the first quarter of 2010 as the global economy recovers, according to Macquarie Securities Ltd. and Royal Bank of Scotland Group Plc....MORE

The cherry on the Dairy Queen has to be Senator Ben Nelson's backroom deal to get the other 49 states to pick up Nebraska's Medicaid tab in perpetuity, keeping Warren's state income and sales taxes down.*

Senator Ben was Nebraska's Insurance Commissioner, I'm guessing he could find 1440 Kiewit Plaza.

*Here's the latest, via Fox News:

Nelson Says More Senators Seeking Special Treatment in Light of Nebraska Deal

Nebraska Sen. Ben Nelson, who has faced a heap of criticism for appearing to trade his vote on health care for millions in federal Medicaid money, said he's considering asking that the Nebraska deal be stripped from the bill. But he said other senators are looking for special treatment in light of his success....