Company: Berkshire Hathaway

Founders: Oliver Chace

Industry: Insurance; Financial Services

History:

Berkshire Hathaway is a company that was initially set up as a textile manufacturer in 1839 by Oliver Chace. During that time, the company was based in Valley Falls, Rhode Island and operated under the name Valley Falls Company. It eventually merged with and used the name of another textile manufacturer, Berkshire Fine Spinning Associates (originally Berkshire Cotton Manufacturing Company, which was based in Massachusetts).

The Hathaway name became part of the company in 1955, when a merger between the Hathaway Manufacturing Company and Berkshire was successfully agreed on. The Hathaway Manufacturing Company was then a textile business that successfully recovered from the textile decline and the Great Depression. The merger resulted in the company relocating its headquarters to New Bedford, Massachusetts and installing 15 factories that employed over 12,000 laborers. However, as the demand for textile continued to dwindle, seven of these locations eventually closed down with huge layoffs but not before it surpassed $120 million in revenue.

Warren Buffett, the man who would become Berkshire Hathaway’s CEO, came into the picture in 1962, when he started purchasing Berkshire Hathaway shares. He was eventually able to buy enough shares to allow him to change the management and eventually gain control of the company.

During Warren Buffett’s time, he still kept the company’s textile milling business but eventually, the company started investing in the insurance industry among other things. His purchase of the National Indemnity Company marked the company’s first venture into the insurance market, which proved to be very successful. The last Berkshire Hathaway plant was closed in 1985. Buffett continued to direct Berkshire Hathaway into other investments, which led them to owning brands such as Dairy Queen, Clayton Homes and MidAmerican Energy Holdings.

Currently, Berkshire Hathaway stands as the most respected company (Forbes 2007) and currently has the world’s richest man as its CEO and largest shareholder. Berkshire Hathaway is also one of the few companies that have reached the $100,000 share price.

Leaders:

• Warren Buffett – Chairman & CEO
• Charlie Munger -Vice Chairman