Berkshire Buy Means Longer BNSF Focus

The purchase of BNSF Railway by Warren Buffett's Berkshire Hathaway will free up the railroad's executives to focus more on developing rail assets for the long term, said BNSF Chairman, President and CEO Matthew K. Rose.

The rail firm's other investors approved the Berkshire deal, as expected, in a brief special shareholders meeting Thursday at BNSF's Fort Worth, Texas, headquarters. The merger is expected to close on Feb. 12, making BNSF a wholly owned Berkshire unit.

Rose, in a short press conference, said that under Berkshire's ownership "this team will always be very performance-driven, and we will be very focused on . . . putting up great numbers in terms of running these (railroad) assets. But we won't be necessarily worried about an individual quarter. We will be looking at the longer-term horizon."

He said one thing he will not miss about running BNSF as a standalone public company will be the quarterly earnings reports and calls with Wall Street analysts. "It's frustrating sometimes," Rose said, because the railroad is buying and deploying assets that it will use for decades while stock investors are looking for fast returns.

Buffett, said Rose, "has a great reputation for looking past the quarters." Rose also said that Buffett "has been very clear that we need to think of this as a family owned business that we'd owned for a hundred years, and to make the long-term investments and long-term strategic decisions in that spirit."

He said the investment-return view has shortened considerably in the past decade, with average stock buyers going from holding a stock an average of 5 to 7 years 10 years ago to just 1-3 years now. Berkshire, by contrast, invests for the long term.

"We think that by combining with Berkshire Hathaway, quite frankly it will be very consistent with their idea of long-term ownership as well," Rose said.

- John D. Boyd, The Journal of Commerce.