Buffett raises stake in GM by 60%

Buffett raises stake in GM by 60%
David Shepardson and Melissa Burden
The Detroit News
Warren Buffett
Warren Buffett (Matt Kryger / Associated Press)
Washington — Billionaire Warren Buffett’s investment arm Berkshire Hathaway Inc. boosted its stake in General Motors Co. by 60 percent to 40 million shares, the conglomerate disclosed in a filing early Thursday. That brings Berkshire Hathaway’s holdings to 2.9 percent of outstanding GM stock.

The firm initially purchased 10 million shares in 2012, when the stock was trading in the low $20-per-share price. It closed Thursday at $34.55, down $1.02. At current prices, the stake is worth more than $1.38 billion.

Buffett acquired the new shares in GM in the three months ending June 30. That’s the same period during which the U.S. Treasury has been steadily selling off its holdings in GM it received as part of its $49.5 billion bailout.

GM North America President Mark Reuss told reporters Thursday in Detroit that Berkshire’s stock purchase is a positive boost for the company.

“We work really hard every day to do the right things and make the right cars that people want to buy. When someone does something like that it makes us all feel we’re on the right track…,” he said. “Frankly, it’s been a tough four years coming out the financial crisis we were in and a little bit of validation here and there is OK. But we’ve got a lot of work to do, and we’ve got to keep our heads down here and keep it going.”

GM returned to the S&P 500 during the second quarter of 2013, a milestone triggered in part by the U.S. Treasury reducing its GM stake.

Buffett’s preference for buying stocks and businesses rather than bonds has helped his company weather a spike in interest rates this year. Omaha-based Berkshire Hathaway’s equity portfolio, which is about three times larger than its fixed-income holdings, rallied past $100 billion in the second quarter.

“His portfolio has been moving up nicely,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business who has taken students to meet Buffett in Omaha. His allocation to stocks “not only has been the right strategy until now, it’s very likely to be the right strategy going forward.”

Berkshire Hathaway has major investments in auto insurance, life insurance, annuity sales and sales of jewelry. It holds large stakes in other major companies, including Coca-Cola Co.

Bloomberg News contributed

Seniority Lists
Bargaining Committee

Mike Herron
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

Tim Stannard
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts

GM Unit Chair
Mike Herron
Leadec Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Katherine McGaw
Retiree Chair
Mike Martinez