Buffett threatens to quit USAir board unless costs are cut
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Your support makes all the difference.WARREN BUFFETT, a long- time investor in USAir, has threatened to resign as a director of the troubled airline and joined British Airways in demanding that it cut its costs by dollars 1bn a year.
Mr Buffett's Berkshire Hathaway group - known for taking large long-term, passive stakes in leading US companies - said in a statement filed with regulators that it supported a plan announced by USAir managers earlier this month.
But it warned that the company's presence on the USAir board depended on it reaching a 'timely agreement' on the plan, bringing new pressure on the airline's unionised employees to accept contract concessions.
Berkshire Hathaway is a large holder of USAir preferred shares, making it in effect the airline's second-largest shareholder after BA, which owns 21 per cent. Mr Buffett first took a friendly stake in USAir at the depths of the airline recession in North America in 1991 and increased it to the equivalent of 10.5 per cent in May 1993 when BA added to its holding.
BA originally intended to double its stake in USAir but announced in March that it was suspending its plan because of unexpectedly large losses by the carrier. Sir Colin Marshall, BA chief executive, has since warned that BA might write down its existing investment if the plan is not adopted before 27 July.
Mr Buffett - who also owns large stakes in Coca-Cola, Wells Fargo Bank, the Washington Post newspaper and the ABC television network - is perhaps best known for his role in reviving Salomon Brothers in the wake of the 1991 US Treasury auction scandal.
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