Berkshire Hathaway 2002 Annual Meeting Audience Question # 46

Warren defends Kirby vacuums’ sales practices and policies

Warren Buffett:

OK. It’s… we’ve got time for one more question from number 10, and that will complete the cycle, also. So, shoot.

Audience Member:

My name is Jerry Miller, Highland Park, Illinois, shareholder. I don’t want to end this meeting on a down note, although I’m going to do it.

Before I say that, I would like to make a positive statement, one of many, but I’ll hold it to one.

I have…since I’ve been retired, I’ve gone to quite a few shareholders meetings. And I only wish there was some way I could force most of the CEOs to attend.

They may not understand what’s going on, but I would just like them to see how a shareholders meeting should be handled.
And now for the down… a little bit.

I’m downstairs. I can hear some good results.

The… if you’re going to sit behind the desk that says the $37 billion buck stops here, you’re going to have to handle all questions.

The one that I was really surprised I didn’t hear, and I… today from anybody, including you… the two of you… would…

Although they’ve taken the ‘E’ word away from us, and the ‘AA’ word away from us, I don’t want them to take the Berkshire Hathaway ‘K’ word away from us.

Do you understand that? If you do, just wave a finger. And if not, I’ll explain it.

Warren Buffett:

Well, you’re 0 for 2 at the head table. So, you better explain it.

Audience Member:

This morning, I had to chide some of the fellows down the stairs at the Kirby. A couple of weeks ago, there was a stain… or a tarnish… appeared on the Berkshire Hathaway name, and a little crack appeared in the charisma. Did you happen to see the program?

Warren Buffett:

Yeah, I saw the program. And it was interesting because it was focusing on the sales practices… or alleged sales practices… of some people that don’t work for us, but work for distributors, just like salesmen work for Ford dealers or something of the sort.

And particularly, it was talking about them selling to older people. And interestingly enough, over 10 years ago, we put in a policy, which to my knowledge is the only one like it in the country, in that anybody, anybody over 65 who buys a Kirby vacuum and is unhappy for any reason, any time, up to a year, 11 months and 29 days later, can tell us so and they get their money back without question.

And I don’t know of another consumer durable sold like that in the country. And one of the interesting things was that the fellow they interviewed, who talked about his mother having bought one and being terribly unhappy about it, had actually used the product for eight or nine months and gotten a full refund.

And that fact was not mentioned on the program, nor was the fact even that we had this policy. And I really regard that as rather extraordinary journalism.

Audience Member:

I trust you’re not dusting off… your Salomon notes then to read to the Kirby people.

Warren Buffett:

No, I can understand your reaction to the program, because it was pointed out to ABC News several times prior to the program, that this policy existed, that 300-and-some people in the previous year, and if they gave us a trade-in on the… on it and we… and they decided to call it off 11 months later, we gave them their money back, plus a machine equal to the… or better than the machine they gave us. And not a word was said about that in the program.

So, it… I do not regard it as a great moment in ABC journalism.

Audience Member:

Anyway, thanks for (This part of the audio is inaudible)…

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