New Bedford, MA
“The Berkshire Hathaway Company was living on borrowed time on May 10, 1965, the day the man who would one day be the second wealthiest human alive arrived at its modest New Bedford headquarters and seized control,” reported Steve Urbon in the New Bedford StandardTimes newspaper in 2004. The man who came to rescue BerkshireHathaway was Warren Buffett, middleaged investor from Omaha, Nebraska.
1839. Oliver Chace founded what eventually would become Berkshire Hathaway as the Valley Falls Co., Valley Falls, Rhode Island. Chace gained his textile experience with Samuel Slater and started his first plant in 1806. Berkshire Cotton Manufacturing began in Adams, MA in 1889. The two companies merged and became Berkshire Fine Spinning Associates. (Wiki)
1847. The Hathaway Manufacturing Company began as the citizens of New Bedford looked for a way to diversify and invest as the whaling industry slowed. Horatio Hathaway founded Hathaway Manufacturing Co. in 1888 as a cotton mill. The company expanded and slowed as the fortunes of the country moved through boom times and depression. “The company survived the downturns of the 1920s, (sic) and resisted the exodus of textiles to the South.” Seabury Stanton, the president spent money during the depression when others held back.
1954. Hurricane Carol flooded the property on Cove Street. Seabury Stanton looked for help. Along with his brother Otis Stanton also with the company, they decided to look for a partner. 1955. Merged Hathaway with Berkshire Fine Spinning Associates, Inc. of Providence, Rhode Island, run by Malcolm Chase. The new company had 12,000 employees in 15 plants with headquarters in New Bedford. The net worth was $53 million. (Buffett)
1964. The company had shrunk to two mills with a net worth of $22 million. 1965. Most textile money had left town, leaving the company as almost the sole survivor. Buffett purchases BerkshireHathaway. Buffett had quietly set his sights on Hathaway and began acquiring stock in the early 1960s. Ken Chace, vice president of manufacturing, was installed as president with instructions to cut costs. Profits would be invested elsewhere – insurance, banking, publishing. Later Berkshire Hathaway invested in CocaCola, The Buffalo News, The Washington Post, manufactured homes, and furniture retailing. Anything profitable but nothing related to textiles. By 1968, the New Bedford site was down to one building.
Cotton textile production ended in 1969. Rayon linings and synthetic curtains continued to run until 1986. The company did not close because it continued to make money. When the plant closed, it was the last textile mill in the city of New Bedford.
Figure: Berkshire-Hathaway - clock tower
The complex was sold at “firesale” price in 2000 without cleaning up the industrial site.
Ken Chace died in 2002. Buffett supported him to the end as he managed to deliver profits. When the last profits were extracted, the plant closed.
- http://archive.southcoasttoday.com/daily/05-04/05-09-04/d01bu131.htm, Accessed Feb 5, 2008.
- Wikipedia Berkshire Hathaway, Accessed March 11, 2008.
- Buffett Shareholder letter 1977. Accessed Berkshire Hathaway March 11, 2008