See's Candies stores are mostly west of the Rockies, but during the Christmas season you can buy the Berkshire Hathaway company's chocolates, peanut brittle and other holiday goodies in person from Maine to Alaska, Florida to Hawaii, but not in Vermont and West Virginia.
CEO Brad Kinstler, a former Nebraskan, said See's candies must be sold within 60 days. “The taste of fresh candy is significantly better than product that has been on the shelf for six months or more, and our customers can tell the difference.”
That makes it difficult to stock year-round stores that are far from See's California candy factory.
But during the holiday season, See's supplements its permanent locations with 125 “Holiday Gift Centers,” which are mall carts with double-sided shelves, a cash register/wrapping station and a display tower. The company hires about 1,000 temporary workers to run and stock the carts through Dec. 26.
To keep the candy at the far-flung carts fresh, See's ships new supplies weekly, on average, depending on sales at each location. Much of the candy is produced after Nov. 1.
East of the Rockies, See's only company-owned permanent locations are in Minneapolis, Milwaukee, Chicago, Texas and Oklahoma. The Nebraska Furniture Mart in Omaha, Lord & Taylor and Macy's have licenses to sell See's products. See's may start using the temporary carts for Valentine's Day and Easter seasons, two other candy-heavy holidays.
Locations with successful carts are more likely to end up with permanent stores, Kinstler said, since the carts help build customer followings and brand recognition.
Own tax bill would rise
Some opponents of Berkshire Chairman and CEO Warren Buffett's proposed minimum tax rate for high-income people argue that he has little to lose if Congress raises tax rates. He doesn't pay taxes on his Berkshire stock because it doesn't pay dividends, and he is donating nearly all of his wealth to nonprofits, shielding those billions from income or estate taxes.
While it's true that the dollar increase would be small in relation to his $48.7 billion worth of Berkshire stock, Buffett's tax proposal would nearly double his own federal tax bill, based on his 2010 tax income.
Buffett has said his 2010 adjusted gross income was $62 million, with deductions bringing that to $39.8 million in taxable income. He paid $6.9 million in federal taxes, or 17.4 percent. He proposes a 30 percent minimum rate on annual income between $1 million and $10 million and 35 percent above that.
Applying the proposed rates to his 2010 figures, with no changes in deductions or other factors, Buffett would pay something like $174,000 on his first $1 million, $2.7 million on the next $9 million and $10.4 million on the remaining $29.8 million. That's $13.3 million total, a combined 33.4 percent tax rate and $6.4 million more than he paid in 2010.
Contest for youths
Young entrepreneurs can submit business ideas to the “Grow Your Own Business Challenge” held by Buffett's Secret Millionaires Club, an animated series that teaches financial lessons to children.
Students ages 7 to 16 should submit entries by Feb. 15 to smckids.com. Finalists will be flown to Omaha to present their ideas to Buffett and learn more about businesses. Judges will award prizes up to $5,000.
Buffett voices his character in the cartoons, which are produced by A Squared Entertainment.
Eager for the top flight
Buffett already is asking about flying in new aircraft recently purchased by NetJets, Berkshire's private jet leasing company.
Jordan Hansell, chairman and CEO of NetJets, told Bloomberg TV's Betty Liu recently that the new Bombardier Global 6000 is the company's “signature series aircraft. ... They're going to be more comfortable from a sound perspective, more comfortable from a humidity perspective, more comfortable from a seating perspective and so forth. So these are going to be on the cutting edge of private aviation and aviation generally. They're going to make the flying experience much, much more comfortable and pleasant.”
Buffett, a NetJets client, usually flies in a Dassault Falcon or a Gulfstream or one of the Globals, Hansell said, and wants to try out the new models. “And so we'll do our best,” he said. “We've got to slip him in as well.”
From a description from Bombardier's website:
“Cruising majestically through the sky, Bombardier's Global 6000 aircraft is the performance benchmark in the ultra-long-range jet category. This jet was purpose-built to fulfill the desires of the most sophisticated and demanding business travelers without compromise. ... The world's leaders and their staff can stay at the top of their game, surrounded by an ample galley, dedicated crew rest area, generous main cabin and luxuriously traffic-free private stateroom.”
Well, sign us up.
Watching a bin maker
The Globe and Mail of Canada recently linked Buffett's name with Vicwest Inc. of Oakville, Ontario, a commodity storage company, because Berkshire controls CTB Inc., one of the largest bin-makers in the United States.
Vicwest has a 60 percent share of the grain and fertilizer storage business in Canada, the newspaper said, and is developing a market for bins to store liquids used in “fracking,” an oil production process. The company also makes metal siding, roofing and insulated panels for commercial and industrial use.
Vicwest earned 53 cents a share in 2011, and a recent report projected that to reach $1.62 in 2014.
U.S. policy frustrates son
Buffett's son, Howard, said recently that a dysfunctional U.S. immigration policy and lack of recognition of migrant farmworkers is creating a labor shortage and billions in crop losses, according to the Yuma (Ariz.) Sun.
Buffett spoke at a Dia del Campesino, or Day of the Farmworker, event in San Luis, Ariz.
“We all know that supermarket shelves, from California to New York, are filled thanks to the work of all of you,” Buffett told several thousand people at the event, many of them from Mexico. “It is very frustrating to see that the work, the commitment and the sacrifices that you make for this country are not recognized.”
Buffett has farms in Nebraska and Illinois, and his foundation supports efforts to improve agriculture in Third World countries and to combat hunger in the United States.
He said the immigration debate should be a separate issue from migrant farmworkers, but stiffer immigration regulations have hurt farm production in Michigan, Georgia, Nebraska and other states.
Without resolving the nation's immigration policy, he said, “in a few years we will see the production leaving the country for lack of labor, because the major part of the agricultural industry depends on that labor. We need to have an immigration policy that works to meet those needs. The current policy does not work.”
Hot ideas in Cleveland
Warren Buffett heard pitches from dozens of small-business owners in Cleveland last week as part of the “10,000 Small Businesses” program he and the Goldman Sachs Foundation started after the 2008 financial crisis.
The Plain Dealer reported that Buffett sat with Cleveland Mayor Frank Jackson and Jerry Sue Thornton, president of Cuyahoga Community College, in a classroom as the business owners talked about their plans.
“It was nerve-wracking,” said Edward Agoston, who pitched a digital billboard on wheels. He also sells and rents trailers, hitches and snowplows. Buffett made some jokes but also seriously questioned the students about their businesses and plans. The key to success, he told them, is satisfied customers.
He also made his first visit to the headquarters of Lubrizol Inc., the chemical company bought by Berkshire in 2011, in nearby Wickliffe, Ohio, the News-Herald of Willoughby, Ohio, reported. He met and ate lunch with its top executives and toured its facility.
'Fuzzy math' at bank?
The Financial Times reported that Deutsche Bank avoided more than $12 billion in losses on derivatives during the 2008-09 financial crisis with “fuzzy math,” and that some of the insurance-like investment contracts involved other parties, including Berkshire.
TheStreet.com said the Times' reported that three former Deutsche Bank employees filed complaints with the U.S. Securities and Exchange Commission. They alleged that the bank did not “mark” the market price of the $130 billion in contracts as they should have, making them appear more valuable than they were. Deutsche Bank said in a statement that the allegations were old and thoroughly investigated and are “wholly unfounded.”
If the contracts weren't priced correctly, TheStreet.com reported, Berkshire might have missed out on a windfall or a huge loss, depending on how the contracts were structured.
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