Warren Buffet’s School Bus Bet

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A closer look at the company behind the newest Type A OEM

Manufacturing may be down in the past two years, but Warren Buffet is betting on school buses. This month, recreational vehicle manufacturer Forest River’s Starcraft commercial bus division, which Buffet owns through his investment firm Berkshire Hathaway, introduces its first-ever Type A school bus.

Starcraft will have a complete line of yellow Type A school buses and white multifunction school activity buses on both Ford and GM single- and dual-rear wheel chassis available starting in January 2009.

According to a 2008 interview, Buffet tendered an offer for Forest River back in 2005, just a week after receiving a fax outlining why Berkshire Hathaway should consider purchasing the company. While Berkshire Hathaway owned an array of companies ranging from Geico Insurance to See’s Candies and has considerable holdings in an alphabet soup of stocks, it had yet to invest in the automotive production business. But Buffet professed faith in owner Peter Liegl and Forest River. And with good reason. According to figures cited in RV Business, Liegl helped to create a $1.6 billion company in just nine years.

So far, Berkshire Hathaway maintains it’s characteristically hands-off approach with Starcraft. General Manager David Wright said he did not have to ask permission from Berkshire Hathaway to start the new school bus venture. Buffet’s faith in Forest River may bode well for the new school bus producer. Berkshire’s Hathaway’s instincts and long-term track record are hard to beat. According to its own figures, returns to investors averaged around 21 percent over the last 40 years, outperforming the S&P 500 by 11 percent.

For more on Starcraft’s new bus, see the complete article in the January 2009 issue of School Transportation News.