Warren Buffet Africa Country $ 230 million 10% Chinese electric car
BYD is an incredible company he started with a government chemist and researcher named Wang Chuan-Fu in 1995 year Yahoo to manufacture rechargeable batteries, he has learned to do very well in recent years, batteries BYD were cheaper and just as reliable as those made by industry giants Sony and Sanyo Then M. Wang, as he's known, has entered the automotive sector through the purchase of a car company owned faulty cars fueled conventional gas BYD sell well these days in China, and its electric plug-in electric model looks like it will come to market with a greater range and a price lower sticker to the new heavily hyped Toyota Prius Chevy Volt as if that was not enough, I now hear that BYD is about a breakthrough in the field of solar energy and the company has big plans for making batter ies rechargeable utility scale for storing energy from intermittent renewable sources such as wind and solar power Today, BYD employees 130,000 people in 11 plants, both in China and one in India, Hungary and Romania.
This track record - and potential - is what convinced the company to Warren Buffett, Berkshire Hathaway, bought 10 percent of BYD in last fall to 230 million This could prove to be one of the best price Buffett Here's what Charlie Munger, the longtime friend of Buffett and Vice Chairman of Berkshire, told me about M. Wang this guy is a combination of Thomas Edison and Jack Welch - something like Edison in solving technical problems, and something like Welch to do what to do I've never seen anything like that Munger, by the way, is a famous grumpy, which usually comes with all kinds of why the latest idea Buffett investment won t pan out not so this time.
The other key player in the Berkshire BYD case is David Sokol, chairman of MidAmerican Energy, a utility company owned by Berkshire and an interesting guy in his own right, I'll blog about Sokol later this week - is a big believer in renewable energy Sokol made the most of the due diligence on BYD for Berkshire, and now serves on the board BYD too, was very impressed with M. Wang.
Here are three reasons why I think BYD will become an important company in the not too distant future 1 feat of engineering BYD According if you count the trainees, BYD employs between 10,000 and 17,000 engineers and s recruit permanently the best graduates China s engineering and technical schools producing region of Shenzhen, where the company has its headquarters, is known for unskilled labor cheap, but the competitive advantage of BYD takes its workforce They are skilled cheap on the summit, M. Wang said, when I visited BYD last year This is a company that has invented new methods of how he stacks and products battery in the electric car and he focuses on innovation innovation seems to be the personal passion of M. Wang 2 towards pioneering BYD Sokol is a student of management, he wrote a small liv re on the subject called Pleased but not satisfied - and was impressed with thoughtful and deliberate approac Mr. Wang pm to building his business So I was not many entrepreneurs turn into effective leaders of global companies with 100,000 This fact or more employees didn t make history, but I was interested to learn that BYD is working with the outpost of Hong Kong business for social development responsible Unlike some of its domestic competitors, BYD wants adopt best practices in health and safety, as well as find ways to empower people to improve society Jeremy Prepscius, director Asia BSR, told me what makes them unique is that you have a Chinese company , large, that values continue to evolve its internal culture and recognizes that it is not only a culture of command and control high e No low They are somewhere between an ancient Chinese state firm and a Japanese modern society like Toyota Sokol said that M. Wang sought his ideas and criticisms whenever they may encounter surprising that many entrepreneurs have the confidence to act that way down, it is difficult to k now if BYD has a strong bench of managers behind the commitment of M. Wang 3 China clean energy While I admire energy and environment team of the Obama administration, there's no way that the US government will help auto US companies and battery manufacturers as much as the Chinese government will help BYD as Keith Bradsher New York Times reported in a page one story Chinese leaders earlier this month adopted a plan to transform the country into one of the leading producers of hybrid and all electric vehicles within three to ns, and making it the world leader in electric cars and buses after the government will direct subsidies to car manufacturers as we do, of course, and also provide grants of up to 8,800 are offered to fleet taxi and local government agencies in 13 Chinese cities for each hybrid or all-electric vehicle they purchase.
Finally, it's fascinating note of this story, and it involves a man named Li Lu, who was born in China in 1966, the same year that M. Wang When I started presenting the story, I wondered how Buffett and Munger BYD had become aware of this issue led me to Li Lu, who runs an investment firm, where Munger is an investor, based in Pasadena, which has about 2 5 percent of BYD He was the link between Berkshire and BYD .
Li Lu, it turns out, was also a leader of the pro-democracy movement that organized mass student protests in Tiananmen Square in 1989 - it was 20 years ago next month, he fled China after hundreds protesters have been killed and appeared on twenty -one China wanted list.
Escape from New York, Li Lu was adopted by the community of human rights and wrote a memoir called Moving the Mountain, which reads like a movie Her educated parents were forced into labor camps during the Cultural Revolution and, at the age of 10 years -boy, it barely survived an earthquake that killed 250,000 in the city of Tangshin.
In the 1990s, Li Lu earned three degrees in six years of British - a bachelor's degree in economics, a law degree and an MBA He worked for Allen Co and at Donaldson, Lufkin Jenrette before beginning his funds investment When David Sokol first flew to China to visit BYD, he was arrested at LAX for dinner with Li Lu, after which they traveled together in Hong Kong Li Lu is still not allowed to move freely in China.
Li Lu politely declined to speak with me my story, telling me that some people in China are still unhappy with his role in the Tiananmen Square protests M. Wang is not among those who s past, he said today, M . Li and I share the conviction that the best way to help China move forward is to make BYD a world class company.
Li Lu agreed to come to the Brainstorm Green conference next week FORTUNE BYD speak I'm looking forward to meet him and learn more about this remarkable company BYD You can read my story here.
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