| OMAHA, Neb.
OMAHA, Neb. May 6 Warren Buffett on Saturday
downplayed suggestions that Berkshire Hathaway Inc's
partnerships with Brazil's 3G Capital, a renowned cost-cutter,
undermined Berkshire's own value system.
Speaking at Berkshire's annual meeting in Omaha, Nebraska,
Buffett said, "there is a good chance we will do more, and
perhaps bigger things" with 3G, which was co-founded by fellow
billionaire Jorge Paulo Lemann and which with Berkshire controls
food company Kraft Heinz Co.
But he acknowledged disliking imposing the kinds of deep
cuts, including the loss of many thousands of jobs, for which 3G
"Change is painful for a lot of people, and I would rather
spend my days not doing that sort of thing," he said. "But I
think it is absolutely essential to America that we become more
The 3G firm is known for "zero-based budgeting," where
managers must periodically justify all their expenses, and cost
controls such as requiring photocopies to be double-sided.
Berkshire and 3G jointly bought H.J. Heinz Co in 2013 and
merged it with Kraft Foods Group two years later.
Buffett also helped finance 3G's merger of the Burger King
and Tim Hortons chains to create Restaurant Brands International
More recently, Berkshire and 3G worked together on Kraft
Heinz's proposal to buy European food company Unilever NV
for $143 billion, only to be turned down.
Buffett revealed on Saturday that Berkshire and 3G, which
together own 51 percent of Kraft Heinz, had each been prepared
to devote $15 billion of cash to the transaction.
He said Berkshire prefers buying companies that are already
efficient, and that 3G is not alone in trying to slash costs at
companies that may be less efficient.
"The 3G people do it very fast, and they're very good at
making a business productive with fewer people," he said. "But
we have been doing that in every industry."
Charlie Munger, Berkshire's vice chairman, concurred, saying
at the meeting he found no "moral fault" in 3G's approach.
Buffett noted that he has had to oversee job cuts himself,
citing job losses at the original Berkshire Hathaway textile
business, which shut down 20 years after he took it over.
"We fired 2,000 people over time ... at the textile
operation," he said. "It didn't work."
(Reporting by Jonathan Stempel in Omaha, Nebraska; Editing by
Jennifer Ablan and Nick Zieminski)