In Business This Week: HEADLINER: LOUIS SIMPSON
THIS SAGE ISN'T FROM OMAHA
Louis Simpson has moved from the sidelines to the spotlight at the stroke of a pen--billionaire Warren Buffett's pen. Simpson, president of capital operations for Geico, has been beating the stock market since at least 1980. But Geico became a subsidiary of Berkshire Hathaway last fall--and in his annual letter to shareholders, Berkshire CEO Buffett says Simpson, 59, would be a worthy backup for him and Vice-Chairman Charlie Munger.
Buffett, arguably the nation's top investor, writes that Simpson is "immediately available to handle [Berkshire's] investments if something were to happen to Charlie and me." Like Buffett, Simpson gets to know management at companies he invests in and makes long-term stock picks.
Munger says Buffett was not making Simpson his heir apparent, however. "We could have done [that] directly and not in some crazy, indirect way," he says. Buffett apparently just wanted to reassure shareholders that Berkshire's $22 billion in common-stock investments will remain in capable hands. Quite a plug for Simpson.EDITED BY KELLEY HOLLAND, BY GREG BURNSReturn to top
IF VALUJET CAN MAKE IT THERE...
VALUJET AIRLINES IS BITING into the Big Apple. After leasing landing slots from Continental Airlines, the upstart is launching five daily flights to LaGuardia from its base in Atlanta, where it was launched in October, 1993. ValuJet promises fares up to 65% below Delta Air Lines, the only line now flying Atlanta-LaGuardia nonstop. A lawsuit claiming TWA and Delta conspired against ValuJet could net the carrier five more landings this summer. The fast-climbing company is having growing pains, though. The Federal Aviation Administration is eyeing ValuJet's safety record and procedures after four recent mishaps, including an engine fire, a landing with no nose gear, and a plane sliding off a runway. An FAA official says no negligence has been uncovered, but the review is ongoing.EDITED BY KELLEY HOLLANDReturn to top
254 MILLION DOLLARS UP IN SMOKE?
THEY WERE A MODERN-DAY Bonnie and Clyde--minus the gory fade-out. On Mar. 19, agents from the FBI arrested two people who may have defrauded a syndicate of banks out an estimated $254 million since 1993. Edward Reiners and Judy Rose Bachiman allegedly posed as Philip Morris employees to borrow from a group of banks led by Richmond (Va.)'s Signet Bank. Signet could be out $81 million, while NationsBank has a $60 million exposure. The banks say they expect to recover much of the money.EDITED BY KELLEY HOLLANDReturn to top
WHERE TO BUY YOUR SPACE SHUTTLE
WHAT A DIFFERENCE A MONTH makes. As recently as February, Rockwell Chief Executive Donald Beall was insisting the $13 billion electronics firm was in no rush to sell off its defense and aerospace businesses. Now, though, investment bankers say the company wants to hawk its $3.5 billion portfolio of B-1 bombers, space shuttles, and guidance systems. The move would let Rockwell focus on industrial automation and automotive work--but it comes late. A wave of mergers in the industry limits potential buyers. Possible bidders: Boeing or McDonnell Douglas.Return to top