OMAHA, Neb. (AP) — Berkshire Hathaway shareholders always celebrate Warren Buffett at the annual meeting, but amid the praise Saturday, investors also questioned a couple of the conglomerate's recent business moves.
Buffett marked 50 years of leading Berkshire Saturday by spending hours answering questions alongside Vice Chairman Charlie Munger before an overflow crowd of more than 40,000 people from around the globe.
The sentiment at the meeting was overwhelmingly positive, and Buffett was again surrounded by a mob of admirers as he toured the product booths in the morning. But the two men faced pointed questions about Berkshire's association with the cost-cutting 3G Capital investment firm and about the lending practices at the company's manufactured home unit.
Berkshire teamed up with the Brazilian investors at 3G two years ago to buy ketchup maker Heinz in a $23 billion deal that was followed by thousands of job cuts. Now Berkshire and 3G are buying branded food giant Kraft Foods.
Several shareholders questioned whether the cost cutting and restructuring methods 3G employs fit with Berkshire's model of buying good companies and allowing them to continue largely unchanged.
"We've never said companies should employ more people than they needed," Buffett said.
Both Buffett and Munger operate with tiny staffs of less than 30.
"We need our businesses to be right-sized," Munger said.
Clayton Homes, is receiving scrutiny because of a recent story by The Seattle Times and The Center for Public Integrity that questioned its lending practices. The story cited examples of high interest rates and customers who felt misled because they didn't realize the lender they were dealing with was owned by Clayton.
Buffett came ready with slides of Clayton homes statistics for his defense of the company that accounted for 45 percent of the manufactured homes sold nationwide last year.
"Clayton follows a pattern that is exemplary and rather extraordinary," he said.
Buffett said Clayton retains most of its mortgages after it lends to buyers, so it loses money if buyers default. The manufactured homes Clayton builds in a factory and brings to a site appeal to many people who can't afford other options.
"I make no apologies whatsoever for Clayton's lending terms," Buffett said.
After Buffett's comments, a spokesman for The Center for Public Integrity, William Gray, said the group and The Seattle Times stand behind their original Clayton story.
Shareholder James Wilbur said he and his wife drove from Seattle to Omaha because they wanted to experience the event while the 84-year-old Buffett and 91-year-old Munger are both still around.
Despite Buffett's age, many investors remain confident in the company's future even after its top two executives are gone.
"I have no qualms about it continuing," said Chuck Sloup, 52, of Omaha. "They've got some pretty awesome performers at the individual companies."
Buffett and Munger said they believe Berkshire's strong culture of allowing its subsidiaries to operate independently will endure for decades.
"I think Berkshire's going to be fine after we are gone," Munger said.
Buffett said he doesn't think it will ever make sense to break apart Berkshire into different units because the conglomerate is worth more than the parts.
At Berkshire's Brooks Running unit, CEO Jim Weber said being part of Berkshire Hathaway has been an asset because it allows him to focus on improving his brand long term.
"I frankly underestimated how powerful it would be for us. The ability to look 10 years out is tremendous," Weber said.
Shareholder Gary Curtis, of Omaha, has been attending the Berkshire meetings for roughly 20 years and seen the crowd grow from a few thousand to the current tens of thousands. Curtis trusts that Buffett has planned well for the company's future.
"Everyone worries about succession. I'm not worried at all," said Curtis, 71. "The guy is so smart. He's going to have that in control."
To eventually replace Buffett, Berkshire plans to split his job into parts. Several investment managers will oversee Berkshire's portfolio, and one of the company's current managers will become CEO, but the candidates haven't been named.
Buffett has no plans to retire, and he says he loves his work and remains in good health.
Berkshire owns roughly 80 subsidiaries, including clothing, furniture and jewelry firms. Its insurance and utility businesses typically account for more than half of the company's net income. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.
Follow Josh Funk on Twitter at https://twitter.com/funkwrite
Berkshire Hathaway Inc.: www.berkshirehathaway.com