By Betty Liu and Andrew Frye
May 2 (Bloomberg) -- Eitan Wertheimer, who sold his Israeli-based company to Warren Buffett’s Berkshire Hathaway Inc. in 2006, thought he could speed the billionaire’s expansion outside the U.S. Instead, he learned to accept his limitations.
“I had a very big lesson from Warren: the use of the word discipline,” said Wertheimer, chairman of Berkshire’s Iscar Metalworking Cos., in an interview with Bloomberg Television yesterday. “I think I was a little wilder before. And he’s very disciplined.”
Berkshire’s acquisition of Iscar, an industrial tool manufacturer started by Wertheimer’s father Stef in 1952, sparked speculation that Buffett would embark on a string of non-U.S. purchases. Wertheimer, who says his most important role now is serving as Buffett’s “travel agent” abroad, accompanied Buffett last year on meetings with scores of business owners during a tour of Germany, Italy, Switzerland and Spain.
Hopes of a buying spree haven’t materialized, and Wertheimer’s job as Buffett’s booker has gotten less demanding since the economy plunged into recession and Omaha, Nebraska- based Berkshire’s stock posted its worst annual performance in at least two decades. In an interview in March, Buffett said that while he still expects to find acquisition opportunities, a U.S. deal was more likely.
“We learned very quickly that our most important asset is our limitations,” Wertheimer said from Omaha, where Berkshire is hosting its annual meeting today. “The second thing we understand is that when we respect our limitations we don’t suffer from them anymore.”
Derivative Bets
Berkshire has declined 31 percent in the past year on the New York Stock Exchange, compared with a 38 percent decline in the Standard & Poor’s 500 Index. Berkshire fell $1,995, or 2.1 percent, to $92,005 in composite trading yesterday.
The company has posted five straight profit declines on deteriorating results at insurance units and liabilities from derivative bets on world stock markets. Berkshire said Feb. 28 that book value, a measure of assets minus liabilities, had dropped by about $8 billion from $109.3 billion on Dec. 31. Buffett will announce first-quarter results May 8.
The recession and financial crisis has pushed down the values of companies from the manufacturing and construction industries to those in banking and insurance. That’s put pressure on some to consider a sale and given takeover opportunities to cash-rich companies like Berkshire, which held $25.5 billion in cash at the end of the year.
No Bookings for Now
“The way things are going, there’s a lot of things that may be happening in the United States,” Buffett said in the March interview. “The odds favor” a domestic deal for Berkshire, he said, while allowing that “I could get a call tomorrow about some company in the U.K. or Germany.”
Wertheimer said Iscar is shrinking along with its competitors as customers, pinched by the downturn, cut production. Still, Wertheimer himself traveled to Japan last year to seal Iscar’s acquisition of Tungaloy Corp.
Buffett, though, has no trips planned at the moment, according to Wertheimer.
“I can dream about it,” Wertheimer said of another tour. “Warren likes to sleep in Omaha.”
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