Peter Lunder

Harold Alfond, who started working in a shoe factory at 25 cents an hour when he was 20, founded Dexter in 1956 with $10,000 of capital. He was joined in 1958 by Peter Lunder, his nephew. The two of them have since built a business that now produces over 7.5 million pairs of shoes annually, most of them made in Maine and the balance in Puerto Rico. As you probably know, the domestic shoe industry is generally thought to be unable to compete with imports from low-wage countries. But someone forgot to tell this to the ingenious managements of Dexter and H. H. Brown and to their skilled labor forces, which together make the U.S. plants of both companies highly competitive against all comers. Frank has known Harold Alfond and Peter Lunder for decades, and shortly after our purchase of H. H. Brown, told me what a wonderful operation they managed. He encouraged us to get together and in due course we made a deal. Frank told Harold and Peter that Berkshire would provide an ideal corporate “home” for Dexter, and that assurance undoubtedly contributed to their decision to join with us.

I think I can see him — John. Don Wurster from National Indemnity. Rod Eldred from the Homestate Companies. Brad Kinstler from Cypress, our worker’s comp company. Ajit Jain, the big ticket writer in the East. And Mike Goldberg, who runs our real estate finance group and also generally oversees the insurance group. Mike. Gary Heldman from Fechheimers. Chuck Huggins from See’s, the candy man. Stan Lipsey from the Buffalo News. Chuck’s been with us, incidentally, twenty-odd years. Stan’s been working with me for well over 25 years. Frank Rooney and Jim Issler from H.H. Brown. Dave Hillstrom from Precision Steel. Ralph Schey from Scott Fetzer. Peter Lunder, who is with our newest acquisition, Dexter Shoe. And Harold Alfond, his partner, couldn’t be with us because his wife is ill. And finally, the manager that’s been with Charlie and me the longest, Harry Bottle from K&W. Harry, you here? There’s Harry. Harry saved our bacon back in 19 — what? WARREN BUFFETT: Well, I think our feelings for the shoe industry are very clear from what’s been happening the last few years. We think it’s a great business to be in as long as you’re in with Frank Rooney and Jim Issler and Peter Lunder and Harold Alfond. Otherwise, it hasn’t been too good. The — we have a couple of extraordinary shoe operations, but they’re not extraordinary because we get our leather from different steers or anything of the sort. It’s — we have two companies, really three now that Lowell’s been brought in, too, but that have truly extraordinary records. I think those same managements would have been enormous successes in any business they’d gone into. But, they have gone into the — they are in the shoe business and the companies earn unusual returns on equity. They earn unusual returns on sale. They’ve got terrific trade reputations. And I think that to the extent we can find ways to expand in the shoe business while employing those managements, we’ll be very excited about doing so.