INVESTMENT INSIGHTS
Warren Buffett defends partner 3G’s capitalist formula
Warren Buffett was not bothered by initial US data showing the economy had grown just 0.7% in the first quarter
Warren Buffett said on Monday 3G Capital, Berkshire Hathaway’s controversial partner in multiple transactions, follows a "standard capitalist formula" when it sweeps away thousands of jobs and imposes deep expense cuts to make the companies it buys more efficient. Speaking on CNBC television, Buffett said, "It’s a defect of mine" that he did not focus as closely on the efficiency of business units at Berkshire Hathaway, the conglomerate he had run since 1965. Berkshire and 3G control Kraft Heinz and recently tried to merge it with Unilever for $143bn, but this was rebuffed. The Brazilian firm is known for "zero-based budgeting", where it requires managers to defend all of their expenses and cut waste where possible. "They have followed the standard capitalist formula ... of trying to do the same business with fewer people," Buffett said. "People live better when there is more output per capita." Nonetheless, he acknowledged that cutting jobs can be a "painful process". Separately, B...
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