At this time, the Bridge cousins faced a nagging concern of many family businesses: the company’s long-term future. That concern entailed numerous sub-issues, including succession to assure managerial continuity and resources to enable the payment of estate taxes. As with their predecessors—Silverman, Ben, Herb, and Bob—cousins Ed and Jon looked to guarantee their family company’s continued existence for future generations. They considered the familiar range of options, including going public, but such routes risked jeopardizing the company’s virtues and culture.
Instead, in December 1999, Ed called Buffett. Barnett Helzberg Jr. had told the Bridges that Berkshire would be a great fit and a wonderful home.44 Helzberg assured them that the family could run its business as it had in the past. At Berkshire, Ben Bridge would join a collection of companies that shared the aspiration for family continuity along with other cultural traits, including budget consciousness and a reputation for integrity.
Ed explained the business to Buffett and supplied the most recent financial figures. Buffett savored the company’s annual sales growth at its stores: 9 percent, 11 percent, 13 percent, 10 percent, 12 percent, 21 percent, and 7 percent over the previous seven years. He appreciated the company’s prudent approach to expansion. And, Buffett also liked that the company was managed by the fourth generation of the family and knew from Barnett Jr. that the company and the family enjoyed extraordinary reputations.
Ed said that it was vital to the Bridge family that the company be allowed to operate as it had always operated. The family did not want directives from a larger owner when they and their kin had a century of successful experience. Buffett promised Ed that he and Jon would be in charge. They knew they could trust this assurance.
Buffett named an offering price, half cash and half stock, and the Bridge family accepted. The company prospers today, expanding into new stores cautiously while sustaining impressive levels of growth in same-store sales. Ben Bridge Jeweler is more than a century old and is now in its fifth generation of family management.45
Many families selling to Berkshire, like the Tatelman brothers of Jordan’s Furniture, and the Bridge family, shared sales proceeds with their employees. When Wolff and Toomin did so for Star’s employees, Buffett wrote: “[We] love it when we become partners with people who behave like that.”46 After Barnett Helzberg Jr. did so, Buffett noted: “When someone behaves that generously, you know you are going to be treated right as a buyer.”47
Intangibles like these—partnership, generosity, fairness—glue family businesses together. Along with valuing soft factors, such as family identity and legacy, these traits help family firms prosper indefinitely, as founders go, second-generation siblings join, and third-generation cousins come to be co-managers. Berkshire seeks out family businesses whose members prize such qualities and offers them autonomy and permanence. The mutual payoff is a durable, multi-generational family business.
Having reached its fifth generation, Ben Bridge holds the endurance record among Berkshire subsidiaries, rivaled by such fourth-generation dynasties as Benjamin Moore and Fechheimer Brothers, and many third-generation firms. Sustenance is rarely easy for a family business, but the more members embrace these intangible values, the greater their economic payoff. Berkshire culture attracts and sustains such businesses.
7
Self-starters
Among Berkshire’s entrepreneurs are several recipients of the Horatio Alger Award, given annually by the society of that name to businesspeople who epitomize the dream of moving from poverty to prosperity in a single generation.1 In addition to Jim Clayton, winners include Albert Lee Ueltschi, a Kentucky-born entrepreneur who founded FlightSafety International Inc. While many associate entrepreneurship with a habit of incubating businesses and moving on to the next one, Berkshire’s entrepreneurs are more inclined to focus on innovation within a business and to toil assiduously in that one domain.
In the case of Ueltschi (pronounced yool-chee), it was all about aviation. At age sixteen, the Kentucky native opened a hamburger stand called Little Hawk and used the profits to take flying lessons. His passion for flight led him to teach other aviators using a plane he acquired with a loan secured by Little Hawk.2 In 1939, Ueltschi was training a federal aviation inspector to conduct snap rolls in an open cockpit plane. On one maneuver, as the plane rolled, Ueltschi’s seat unhinged and his parachute failed. Ueltschi survived but was convinced that there had to be a safer way of teaching aviators to fly. Ueltschi would eventually create the world’s premier pilot training school, using flight simulators to teach routine patterns and emergency drills.