imkittymyers at hotmail dot com
Monday, August 29, 2005
WARREN & ME
I used to work at a Dexter Factory Outlet Shore Store for 5+ years, from 1998 to 2003. The Dexter Shoe Company was started by Harold Alfond in Dexter, ME, in 1956. Dexter shoes were famous for being American made, right up there in Dexter, Maine. The people who actually made the shoes were proud of their work, which was evident in the product's quality. Many of our customers were fiercely loyal to the brand because the shoes were made in America. The Dexter Company stood behind their shoes and repaired and/or replaced them when customers found fault.
Harold Alfond sold the company to Warren Buffett's Berkshire Hathaway conglomerate in 1993. Buffet could see that the cost of manufacturing shoes in the US had become prohibitive, so manufacturing was gradually shipped overseas as factories were closed here in the US.
We had a great labor force. Management loved the people, the people loved the management and we were making decent money and the money just went down the tubes. Because somebody else was willing to work for one-tenth of the wages of the people of Dexter, Maine. There is no domestic shoe industry as a practical matter today.We began to see shoes made in China, Romania, Brazil and Italy in our store's shipments. It was evident to everyone that the quality was inferior to the US made shoes. The customers were not happy; in fact, many were down right livid.
At the time I began working at the store in '98, there were about 90 outlet stores across the United States. Buffett didn't like the outlet stores, and so outlet stores were gradually closed. I can't recall how many were left standing when our store was closed in Nov. '03 ... maybe 40-something? ... but I do remember that closing the stores became a business itself. A core group of employees had the job of traveling across the country closing the outlets. The outlets that did remain open were morphed into Super Shoe Stores. Buffett used to refer to his Dexter acquisition as his worst mistake.
Buffett made a wise business decision to ship production overseas. Had Harold Alfond not sold his family company to Berkshire Hathaway, it's entirely concievable that the company might have gone under. Our customers complained bitterly that the shoes were no longer American made, yet these same people complained bitterly when they had to pay $30 - $40 for a pair of shoes. How often I wanted to say to them, You can't have it both ways!
None of this has much to do with this latest news on Buffett. I have never been a fan of Buffett's, which has nothing to do with Dexter Shoes. I've always suspected he's a liberal, so I was not surprised when I read the following article.
Bearish on Buffett
WARREN BUFFET IS BEARISH on the United States, and he's bullish on Europe. For the first time in his life, starting in 2002, Mr. Buffett entered the foreign exchange markets and shorted the dollar. This rare macro-economic bet was based on a belief that U.S. consumers and the U.S. government were spending beyond their means, and that the trade deficit was a sign of economic weakness.
While his short position was profitable in 2004, he has lost more than half a billion dollars so far in 2005. Some Wall Street sources suggest that his breakeven exchange rate is $1.22/euro, so with the euro trading near $1.21 in mid-June, his short position was seriously in the red.
Buffett's anti-American investment sentiment has cost Berkshire Hathaway shareholders dearly. During the 12 months ending in mid-June, his stock price was down roughly 7 percent, while the S&P 500 was up 5 percent. The stock market voted "non" on this Berkshire investment strategy, just like the French and Dutch voted against the European constitution.
It's hard to figure out why Warren Buffett is so down on the U.S. economy and so enthusiastic about Europe's. But gloom and doom forecasts about the U.S. economy are a dime-a-dozen these days. It's as if we rolled back the clock 20 years and it's the early 1980s all over again.
Protestors, a perv, punitive taxes and po’ white trash all on display.