Buffett says people shouldn’t worry about Berkshire, banks

OMAHA, Neb. (AP) – Billionaire Warren Buffett assured investors Wednesday that Berkshire Hathaway will be fine when he’s no longer around to lead the conglomerate.

Buffett said shareholders shouldn’t worry about the future of the company after Vice Chairman Greg Abel takes over because he will do a great job and Berkshire will still follow the same model of allowing its subsidiaries to largely run themselves while looking for other companies to buy with the substantial cash reserves it keeps on hand at all times.

“The problem for our board of directors is the day I’m not around and Greg’s running it, I am not giving him some envelope that tells him what to do next,” Buffett said. But Abel and Berkshire will still be ready to say within minutes whether they are interested in an acquisition and have the resources to do it.

Buffett said Berkshire is “so damn lucky” to have Abel ready to take over as CEO because there aren’t many executives like him out there. The 92-year-old has no plans to retire, but Abel has been designated as the successor for several years ever since Buffett’s partner Charlie Munger let it slip at the 2021 annual meeting. Abel already oversees all of Berkshire’s non-insurance businesses.

Buffett and Abel appeared together Wednesday on CNBC from Tokyo where they went this week to check up on several companies Berkshire invested in there in 2020 and promote the conglomerate Buffett leads.

Wednesday’s appearance is the first extended television interview Buffett has done since before the pandemic. Buffett used to regularly appear on the cable network to answer questions for three hours at a time several times a year. Buffett and Abel fielded a variety of questions Wednesday, including the recent bank failures and whether railroads, including Berkshire’s BNSF railroad, need to continue improving safety in the wake of several recent high-profile derailments.

Buffett said more banks will fail over time, but most people shouldn’t worry about it because their money is protected by the Federal Deposit Insurance Corp.

“We’re not over bank failures, but depositors haven’t had a crisis,” Buffett said. “Banks go bust, but depositors aren’t going to be hurt.”

There has been an intense focus on improving railroad safety in the wake of the fiery Feb. 3 Norfolk Southern derailment outside East Palestine, Ohio, that prompted evacuations and lingering health concerns after hazardous chemicals were released.

Buffett and Abel said it’s impossible to ensure there will be no derailments because of everything that’s involved in running a railroad, but the industry is generally getting safer over time, and it will get better now.

“There’s no question there’s lessons to be learned for the industry as a whole and there’s room for improvement,” Abel said.

Berkshire owns dozens of businesses besides BNSF, including Geico insurance, a number of large utilities an assortment of manufacturing and retail businesses. It also holds more than $300 billion of investments, including major stakes in Apple and Coca-Cola.

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