By Steve Jordon
WORLD-HERALD STAFF WRITER
Published Sunday January 24, 2010
Lloyd Blankfein, the chairman and chief executive of Goldman Sachs, is attracting criticism for the firm’s actions largely because Goldman Sachs has been the most successful financial company, Berkshire Hathaway Inc. Chairman Warren Buffett said last week.
He said Blankfein succeeded in raising money for Goldman in the fall of 2008 when others couldn’t, and steered the company through difficult times. But when things go wrong, Buffett said, people look for someone to blame and Blankfein is attracting critics, Buffett said at the Holland Center in Omaha, where Berkshire shareholders held a special meeting.
Blankfein was one of several CEOs of financial firms called to testify before a congressional committee about their actions during the financial crisis of 2008-09.
“He’s the piñata,” Buffett said.
A reporter asked whether Buffett had learned anything from listening to the testimony.
“I learned that I didn’t want to testify,” Buffett said.
He also said that the economy will likely recover slowly because the excess that led up to the recession lasted for many years.
“The hangover is sort of proportional to the binge,” Buffett said.
Political battle
Charles T. Munger Jr., son of the vice chairman of Berkshire, is contributing to a political battle over redrawing congressional districts in California, where he lives.
At stake is the political affiliation of as many as a half-dozen seats in Congress.
The Sacramento Bee reported that Munger, whose father is the longtime partner of Buffett, has contributed more than $2 million to a petition drive that would expand the powers of an independent commission so that it could redraw the state’s congressional districts after the 2010 Census.
Bee reporter Dan Walters wrote that the dispute could become “a very expensive political shootout” because a competing group wants to give redistricting power back to the Democratic-controlled State Legislature.
“There’s little doubt that the Munger measure will make the ballot” for the November election, Walters wrote.
The competing group, backed by some leading California Democrats, faces a struggle to get its proposal on the ballot, the Bee said, likely requiring millions of dollars to hire professional signature gatherers.
Gov. Arnold Schwarzenegger, a Republican, and political reform groups succeeded in setting up the independent commission in 2008, saying that state legislative districts drawn after the 2000 Census locked in political power and contributed to state government gridlock.
But because of Democratic opposition the commission doesn’t determine congressional districts. The Munger-backed measure would expand the commission’s power to include the congressional district boundaries.
The Bee said that if the California Legislature redraws the congressional districts, as many as a half-dozen seats in Congress could shift from Republican to Democratic hands. The impact would be less if the boundaries were redrawn by the commission, the newspaper said.
Steel executive visits
The CEO of South Korea’s leading steel maker came to Omaha last week to meet with Buffett, the newspaper Asia Pulse reported, and Buffett might reciprocate.
Posco Iron & Steel Co. said that Buffett is interested in boosting Berkshire’s 4.5 percent stake in the company. He met with Posco CEO Chung Joon Yang at Berkshire’s Omaha office.
According to Posco, Buffett said during the meeting that he should have purchased more Posco shares last year and that he hopes to visit South Korea this fall. Buffett last visited South Korea in 2007.
Posco said it expects to benefit from rising demand from automakers and shipbuilders as the economy recovers. Its goals for this year include increasing production by 16.6 percent and sales by 9.3 percent.
“Buffett offered support for our plans to acquire companies to boost (Posco’s) global presence,” said a company official.
Posco plans to build two steel plants in India and one in Vietnam and is in talks to purchase Thailand’s Thainox Stainless Plc.
Big plans for BYD
BYD Co., the Chinese car company partly owned by Berkshire, plans to enter the Australian market within two years, the Sydney Morning Herald reported.
BYD sold 450,000 cars last year and aims to sell 800,000 this year. Its goals include leading the Chinese market by 2015 and the global market by 2025.
Henry Li, the general manager of BYD’s export division, said at the Detroit auto show that BYD plans to take its gasoline-powered and electricity-powered cars to Australia, but right now the company doesn’t make right-hand-drive vehicles.
“Those are in the schedule a bit later,” Li said.
Last year another Chinese company, Ateco, started exporting to Australia an auto called the Great Wall.
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