Warren Buffett is impressed by Rick Wagoner and buys a Caddy to prove it
Warren Buffett was impressed after watching CEO Rick Wagoner's performance on CBS's "Face the Nation" a couple of months ago. So, the Oracle of Omaha faxed a note to Wagoner praising him for his work in front of the TV cameras, and promised that his next vehicle would be a Cadillac. Buffett apparently has kept his promise, recently sending out his daughter to pick up a new DTS - a sign that he's "behind GM 100%".
Now, we admire Buffett and his investment savvy, and we understand that one doesn't earn $42B by spending irresponsibly (he's said to still live in the house he bought back in 1957). But let us make it very clear that if we ever have an eleven-figure bank balance and find the urge to buy a Cadillac, we will skip right past the DTS and find ourselves zipping around Nebraska in a nice Cadillac STS-V.
[Source: Money/CNN]
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Reader Comments (Page 1 of 2)
slinger 12:33PM (6/06/2006)
I sure hope Wagoner doesn't let this get to his head. Just because you're #1, doesn't mean you don't have to keep on working.
-A friendly comment from a Toyota/Japanese/European Automobile fan.
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mickster 12:34PM (6/06/2006)
I don't know if I would send my daughter out to buy an STS-V; a DTS might make more sense for her :-)
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matt 12:42PM (6/06/2006)
It'd be more of a story if he had picked up some shares.
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Michael Karesh 12:47PM (6/06/2006)
I suspect Buffett bought the best car for him. Not long ago I test drove the DTS and STS (non V, but V8 AWD) with my father. While the old man isn't much younger than Buffett, his two current cars are a Lexus GS 400 and Mazda RX-8, and he mostly drives the Mazda.
He vastly preferred the smoother, quieter ride and roomier, more nicely finished interior of the DTS.
The full review of the two:
http://www.epinions.com/content_209422093956
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Lithous 12:51PM (6/06/2006)
Even just an STS (regulare strength) over a DTS IMO.
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Ethan 12:52PM (6/06/2006)
Why not support GM with a new Z06! It is such a waste when someone has big bucks but chooses to drive a lame car. OK OK... I know that not everyone cares as much about cars as my fellow autoblog readers do, and I know that most millionaires are actually quite frugal and that's a VERY good thing in an age of credit card debt and adjustable loans. Likewise I couldn't be more turned off by the blatent materialism showcased by MTV's My Super Sweet 16- so a story about someone with money who isn't completly engrossed by flagrant materialism is refreshing. But back to cars, I hear that Bill Gates drives a pretty basic car (not sure which one) to work everyday, but at least he has a 959 for weekends....
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iQuack 12:55PM (6/06/2006)
I'd be more impressed if Buffett bought GM stock instead of the Caddy.
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gbh 1:03PM (6/06/2006)
Adding yet more fuel to the fire of deliberate conspiracy to run GM into bankruptcy.
Now, I'm NOT saying that the conspiracy theory is accurate. However, it would be right up the Oracle's alley to buy GM if there's money to be made. *Everything* Wagoner does is anathema to what Buffett has said is a good way to be running a business. GM is exactly the type of company BH wouldn't touch because of bad management. Now all of a sudden, Buffett is singing this retard's praises? Uh-huh.
Either Buffett has lost his mind, or he has angle. He's old, but he seems to have a great grip on the rest of reality. So I think he has an angle. I highly doubt he owes Kerkorian any favors, so what could the money play be?
Buffet and Bershire have a long-term investment horizon. God knows, GM cannot ever make money with it's current structure. It will have to go bankrupt at some point, just to get realistic contracts and clear out the management deadwood that is killing the company.
If BH could buy a bankrupt GM with a (relatively) clean financial slate for around 50-75B, there's ROI in it.
Hmmmm...
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Tool 1:06PM (6/06/2006)
If it is good enough for Warren Buffet, than sign me up.
I'm getting rid of my Bently GT Continental and getting a DTS!
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gbh 1:07PM (6/06/2006)
ooops, "Berkshire" as in "Berkshire Hathaway"
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Corey W. 1:14PM (6/06/2006)
He's 74 years old and looks every day of it!! What other Cadillac do you think he would buy?? Maybe a V or SuperV version of the DTS, any other car would probably not suit him. Hell, the Z06 would probably scare him to death......literally!!
It's good to see the public support for GM though.
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BK 1:15PM (6/06/2006)
This is a genius move by Buffet. You're right #5, it would be impressive if he bought GM stock.
I believe he will eventually.
Remember, Buffet is America's greatest pure investor in history. He's incredibly shrewd and very patient. He's wanting to generate a buzz that will help not only investors' confidence in GM, but for GM itself. He wants GM to succeed royally. However, he himself isn't ready to purchase their stock just yet. He doesn't have enough confidence in GM at this point. However, he wants to, because he knows that if he can purchase stock at a price just a hair above rock bottom level right at the time the other investors are starting to steamroll the increase in GM's stock value, he can make out either like a bandit if GM rebounds like a champion Phoenix or sell just as thinks they've peaked and pocket some profit.
His little PR move is his little way of artificially priming the pump for Wall Street's interest in GM.
Smart move Warren
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YOUR MOM 1:16PM (6/06/2006)
GBH,
YOU'RE NOT GOING TO LET JONATHAN GET THE LAST WORD ARE YOU?
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Tyler 1:32PM (6/06/2006)
I read in Forbes that Buffett drove a five year old Town Car so this isn't a huge leap for him. He beleives in buying American and likes a big luxury sedan so this shouldn't be suprising.
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gbh 1:41PM (6/06/2006)
YOUR MOM,
ROFLMFAO! Thanks for reminding me. Just went back and looked, textbook response. Damned entertaining though.
I'm not sure which one will be more fun to watch unravel, Malcolm (again) or darling little Jonathan.
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rip 1:45PM (6/06/2006)
gbh: GM is worth less than 15 billion in market cap. Considering debt, legacy costs, profitless cost structure, etc., you could probably buy GM for a lot less than 50-75 billion.
The only things left of any real worth in GM is the brand and plants/real estate. Management? Nope. Workers? Nope (because of unions that think it's 1955).
Berkshire could buy GM today if it wanted to.
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YOUR MOM 1:47PM (6/06/2006)
YES, I PUT IN A COUPLE OF POSTS MYSELF, BUT IT DOESN'T SOUND NEARLY AS GOOD FROM ME
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Howard Kerr 1:51PM (6/06/2006)
I might be more impressed if Mr. Buffett bought shares of GM. But I would REALLY BE IMPRESSED if he bought a Chevy Impala or a Pontiac G6. In other words, if he really thought the "AVERAGE" GM product was terrific.
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gbh 2:42PM (6/06/2006)
One more minor point. If Wagoner was not seeing bankruptcy in the near future, why is his retirement package been bankruptcy proofed?
rip,
While I agree you could probably buy GM for ~15-20B in an all cash deal, it's the legacy costs that need to be adressed. No point buying it now, it's too expensive to keep going in it's current form.
If GM does 11 and reorgs, then you can pay lineworkers something realistic, like maybe a ~50K package. Just as important, if not more so, is to get rid of half the overhead staff, and kill Buick while they have the chance.
With the sheer size of the GM, it is pretty much impossible to fix the company. It's going to have to be stripped down and rebuilt. The extant corporate culture is simply not sustainable. GM (Ford too) has been on this road since at least the early 70's. It was only a matter of time.
YOUR MOM, Thanks for the compliment. Though it is entertaining for a short time, it's like arguing with a man wearing a tinfoil hat to keep the aliens from hearing his thoughts. Maybe he is right, but you'll never convince him he's wrong. And it'll just get ugly.
I have not seen Malcolm anywhere automotive conference oriented in years.
Fortunately for Malcolm, many of his former investors haven't either...
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YOUR MOM 3:23PM (6/06/2006)
WELL, IT WAS FUN WHILE IT LASTED
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