The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [453]
In late June, Buffett called Allen Greenberg, his former son-in-law and executive director of the Buffett Foundation, into his office and explained that he had talked to Charlie Munger. Rather than sell The Pampered Chef—one of the options—they had decided to shut down the charitable-contributions program. Greenberg was astounded. The year before, ninety-seven percent of shareholders had defeated a resolution by a pro-life shareholder to cancel the program. Combing his hands through his dark wavy hair, he paced back and forth, pointing out that the contributions came from individuals, not the corporation. People could still donate on their own. Shutting down the program would accomplish nothing. But Buffett had made up his mind.
Greenberg returned to his office to draft a press release that went out to the news wires right before Sun Valley, over the Fourth of July weekend. The phone rang and rang for several days; the secretaries grew weary from ferrying messages up and down the hall. Life Decisions almost instantly put out its own release dropping Berkshire from its boycott list.
But Buffett’s friends, no matter what their views on abortion, mostly reacted the same way: They were stunned. Some were angry. “I was surprised that he gave in on that,” one said. “It didn’t sound like him to back down so easily. Warren is such a principled person. Was it such a big deal that it had to be done?” asked another.31
Though other people in his position might have chosen to stand up to the right-to-lifers, Buffett said he was worried that such a stance might put The Pampered Chef consultants at risk. He didn’t say it, but implicitly, not just their livelihoods but their physical welfare was at stake. Buffett himself was a very big target, not just Sid the Dry Cleaner down on the corner whom nobody had ever heard of; taking a stand might make Berkshire Hathaway, as well as him, a symbol of pro-choice defiance, which was dangerous.32 He shrank from confrontation anyway; this was something he simply could not do.
Afterward, he never showed any sign of rancor over the criticism or the pro-life victory laps. You can always tell them to go to hell tomorrow, as Murph said. There was never any need to do it today. Over the years he had saved himself a lot of trouble by following this advice. Almost as soon as he got past The Pampered Chef sidebar, he simply stopped thinking about it.
Alas, this did not solve the other problem caused by being Warren Buffett instead of Sid the Dry Cleaner. Shareholders at Clayton Homes had begun weighing in for and against the Berkshire bid as the July 16 meeting to vote on the deal approached. Prices of peer companies had started to float upward. Lenders suddenly became more lenient. The argument about the “bottom of the cycle” gained currency. About thirteen percent of the investors, including respected money managers like Brandywine Asset Management, Schneider Capital, and CalPERS, the California Public Employees’ Retirement System, said publicly that they would oppose the deal. Kevin Clayton trotted around the country, meeting with investors and pitching the merger, while Orbis and other naysayers worked the phones and the press. By then Berkshire had lent $360 million to Clayton to finance its stopgap needs. Buffett put out a news release in which he said that he would not raise his price “now or in the future.” If the deal fell through, he would walk away. He also used the release to give an economic forecast for the industry, saying no turnaround was coming.33
Before Buffett bid, nobody had wanted Clayton. Despite a faithful following of hard-core shareholders, it was like a good-looking girl who couldn’t get a partner at the dance. Now she was on Warren Buffett’s arm, headed to the middle of the floor as the fiddlers and pickers began the schottische.