If you’re like me, you don’t think much about carpets.

Except maybe when you spill on one.

But like so many everyday things that we take for granted, carpets have a story to tell,  and it’s becoming an intriguing sustainability story.  Shaw Floors, the world’s largest carpet manufacturer, which is owned by Warren Buffett’s Berkshire Hathaway, recycled 121 million pounds of used carpet last year– reclaiming it from homes or offices, breaking it down into caprolactam, a compound which is a building block of nylon, and then redeploying the nylon to make new carpet.

The carpet pictured above is branded as EcoWorx. It’s a PVC-free, fully recyclable alternative to traditional carpet tile, designed from the get-go to be broken down and remanufactured into itself again and again. More than half of the carpet sold by Shaw is now certified as Cradle to Cradle, the protocol developed by McDonough Braungart Design Chemistry.

In Shaw’s sustainability report, Buffett writes:

Companies today have to consider what kind of impact their decisions will have on both their businesses and the planet – ten, twenty, thirty or forty years from now. And when in doubt, it’s wise to err on the side of the planet.

Nice. Recently, I met with Paul Murray, Shaw’s vice president of sustainability, and David Wilkerson, director of sustainability, to talk about Shaw. It’s a big company–revenues topped $4 billion last year and Shaw employs about 25,000 people, most in manufacturing jobs in the southeast, near its headquarters in Dalton, Ga., the world’s carpet capital. Like its peers, Shaw is enduring hard times because its business is closely tied to the real estate industry; its sales have fallen from a peak of $5.8 billion in 2006.

Shaw has embraced green practices since the 1990s and got formally organized around sustainability about five years ago when Vance Bell became CEO. “A successful sustainability group within a corporation needs support from the top,” Wilkerson said. Bell talks easily about the “triple bottom line” and notes that even during the downturn Shaw has invested in projects like Re2E (reclaim to energy), a plant that turns old carpet into fuel.

[Shaw's work has been overshadowed by the sustainability pioneer in the carpet industry, Ray Anderson of Interface, who died last summer. In case you missed it, here's Paul Hawken's eloquent tribute to Ray.]

Changing the way an industry operates is never easy. Traditional carpet is made from petrochemicals–the surface is typically nylon, the backing is primarily polypropylene. When carpets wear out, most are sent to a landfill. In 2010, about 3.4  billion pounds of carpets were discarded and only about 338 million pounds were diverted or recycled, according to the Carpet America Recovery Effort (CARE), an industry group. Partly that’s a matter of habit, partly it’s economics and partly it’s because breaking carpet down into its component parts isn’t simple. “It’s more like unmaking a layer cake than melting down a bowl of Jello,” Wilkerson said.

For recycling to grow, Shaw and the carpet industry need to both figure out how to recapture plenty of old carpet (assuring ample supply) and find uses for the material at costs that make economic sense (assuring ample demand). Shaw, its execs say, has been working the problem from both ends.

On the supply side, Shaw works with about 50 regional recyclers. A big obstacle for consumers is cost. According to the Carpet America Recovery Effort, “it will likely cost between 5 cents to 25 cents per pound of old carpet to recycle.” (Carpet typically weighs about 4-5 pounds per square yard). Some people have no choice but to pay because their local landfills no longer accept carpet.

On the demand side, Shaw reopened its Evergreen Nylon Recycling plant in Augusta, Ga., in 2007. (It had acquired the facility, which had been shuttered for several years, in 2006.) The plant processes a popular type of nylon, known as Nylon 6, melting it down, and turning it into virgin-quality nylon. That’s the best economic use for old carpet. Alternatively, post-consumer product can be turned into other plastic products, from chairs to auto parts. A third option is to make the carpet into fuel.

“The BTU content of this material is about 25% higher than coal, and it’s about 35% cleaner in terms of emissions,” Wilkerson said.

All of this is a work in progress, and the economics are shaky. Until the value of old carpet rises to the point where consumers are rewarded for recycling, most will probably throw it away. On the plus side, demand for the EcoWorx and a hardwood product called Epic which is also cradle-to-cradle certified continues to grow. Commercial customers, influenced by LEED building standards, are increasingly demanding environmentally-preferable product.

“If you don’t have recycled content on the commercial side, you’re at a competitive disadvantage,” said Murray, who joined Shaw after leading sustainability efforts at furniture-maker Herman Miller.

The bottom line: Shaw can fairly claim the mantle of industry leader.  “We reclaim and recycle more carpet than the rest of the industry combined.” said Wilkerson. But there’s lots of work still to do.

BYD's e6 electric car

Great companies have a purpose that goes beyond making money. Google wants to organize the world’s information. Walmart seeks to save people money so they can live better. The Walt Disney Co. tries to make people happy. (Or at least it used to; Disney’s current mission statement is a bunch of gobbledygook.)

Purpose matters. It’s a big reason why people go to work every day.

BYD, the Chinese company that makes electric cars, batteries and solar panels, has a grand purpose: It wants to save us all from climate change, which it calls “slow suicide.”

In a new company video (below), BYD says:

Glaciers are melting. Sea levels are rising. Who can guarantee that the next victims won’t be us?

Where is Noah’s ark to save human beings?

Where, indeed?

I’ve been fascinated by BYD — the letters are the initials of the company’s Chinese name, but they have come to stand for Build Your Dreams — since writing a FORTUNE cover story about the company in 2009. Two years ago, I visited BYD in Shenzhen, met with its founder and chief executive, Wang Chuan-Fu, and spoke about the company with Warren Buffett, Charles Munger and especially David Sokol of Berkshire Hathaway, who sits on the BYD board. Through its MidAmerican Energy subsidiary, Berkshire Hathaway bought 10% of BYD for $230 million in 2008. Despite some recent stumbles at BYD, the company’s market capitalization has grown to about $33 billion, so Berkshire’s stake is now worth about $3.3 billion. Not too shabby.

Lately, I’ve been in contact with  U.S. investors  who are bullish about the firm. One of them, Shai Dardashti, a Buffett admirer who runs a small money management firm, pointed me towards this seven-minute company video. It’s worth watching (although it ends abruptly for reasons that I haven’t been able to determine).

This video is fascinating in light of  BYD’s remarkable but brief history. Since 1995, it has evolved from a manufacturer of cell-phone batteries into one of China’s largest automobile companies and it is now making a major push into clean energy, both with the manufacturing of solar panels and  utility-scale batteries to store energy. (For more on BYD’s energy storage plans and MidAmerican Energy, see Warren Buffett’s Big Battery Play at GreenBiz. Recently, the city of Los Angeles’s Department of Water and Power (LADWP) and BYD said they would work together to develop a grid-scale battery project for renewable energy storage.

In an email this week, Stella Li, a senior vice president of BYD, told me that solar power and utility-scale energy storage are key parts of what she calls “BYD’s 0-emission solution” and “total green solution.” The idea is to generate energy from the sun, store it in batteries until it is needed and then use the electricity to power BYD’s electric cars and buses.

As the company’s video says:  “How to transform the unaffordable [solar, battery, electric car] technology into affordable and high quality products: This is BYD’s responsibility and its mission as well.”

BYD has its skeptics. The company postponed the introduction of its e6 electric car. BYD’s auto sales, earnings and share price fell this fall, according to Reuters. In October, BYD was fined $443,000 by China’s Ministry of Land and Resources and seven of its factories were seized by the government because the company illegally built them on land set aside for agriculture; the factories were for future production, the company told Bloomberg.

Given the companies outsized ambitions, more stumbles surely lie ahead.

But there are good reasons to believe in BYD. Among them:

Low-cost brainpower. Chinese manufacturers  are the low-cost providers of electronics, toys and textiles because factory workers are paid so little.  BYD’s more significant competitive advantage comes because the company  can hire skilled engineers at a fraction of what they would be paid in the U.S. or Japan, probably less than $1,000 a month. The company employs more than 30,000 engineers. They come from top universities and only those that make it through a challenging, competitive probationary period stick with the company. Its R&D operation, as a result, is vast. BYD can afford to make mistakes.

Battery technology: In BYD’s first business, cell phone batteries, the company dislodged entrenched, global leaders like Sony and Sanyo. Batteries remain central to BYD. Much of the due diligence carried out by Berkshire Hathaway’s Sokol focused on batteries. If BYD can continue to improve on battery costs and efficiency–a big if–the company will improve its competitive edge in three different businesses–rechargeable batteries for consumer electronics, electric cars and energy storage.

The China factor: It’s hard to know what the government’s crackdown on BYD over its factories really means; if the company falls out of favor with the authorities, all bets are off.  But Chinese-owned green businesses like BYD are sitting pretty today. While China’s economy isn’t as centrally managed as it once was, the country still produces five-year plans; as my colleague Brian Dumaine recently reported in FORTUNE, the “government recently decreed that 5 million electric cars will be traveling the nation’s roads by 2020 — up from basically none today.” The government provides all kinds of support (cheap land, tax breaks, low cost loans) to favored companies.

Wang Chuan-Fu

The X-factor at BYD is the chairman and founder, Mr. Wang. He’s obviously an accomplished, driven and brilliant leader. As Charlie Munger, Buffett’s partner at Berkshire, told me back in 2008:

This guy is a combination of Thomas Edison and Jack Welch – something like Edison in solving technical problems, and something like Welch in getting done what he needs to do. I have never seen anything like it.

What’s not clear is how deep and strong the management bench is at BYD. Without speaking Chinese, analysts, investors or reporters can’t get much of a read on the senior managers at the company.

BYD is trying to do so much that Mr. Wang can’t possibly manage it all.

But it’s hard not to root for a company that’s pursuing such big dreams.

–

Hat tip  to Shai Dardashti and Scott Rombach for keeping me up to date on BYD. BYD matters because the world desperately needs low cost solar power, battery storage and electric cars.  Given the lack of progress in Washington and, more recently, in Cancun around the climate issue, we’ve got to hope that companies like  BYD deliver the breakthrough clean technologies needed to avert a climate catastrophe. I don’t see any reason why they can’t…

And on that semi-optimistic note, I will close out this blog for 2010. By my unofficial count, I posted 195 times during the year, including guest posts. It’s been fun, but it’s time for week off.

Thanks for reading.

Enjoy the holidays.

See you in 2011.

BYD's e6 electric car

Warren Buffett is a busy man, and never more so than during Berkshire Hathaway’s annual meetings, sometimes called the Woodstock of capitalism, which attract thousands of people each year to Omaha, Nebraska.

But Buffett found time during this year’s gathering to sit down for an hour with Chuanfu Wang, the chairman and CEO of BYD, the Chinese company that makes cars, batteries, electronics and solar power equipment.

And why not? Berkshire’s MidAmerican Energy Holdings unit bought a 10% stake in BYD for about $230 million in September, 2008. Today, it’s worth nearly $2 billion.

That’s a nifty return, even by Buffett’s standards.

“BYD is really running on all cylinders,” says Li Lu, a BYD investor and money manager who brought the company to the attention of Berkshire vice chairman Charles Munger several years ago. Munger took the idea to Buffett and to MidAmerican chairman David Sokol, who now sits on BYD’s board.

I wrote a FORTUNE cover story about BYD in 2009, met with Mr. Wang in Shenzhen and late had the pleasure of meeting Li Lu. He’s a fascinating guy—participated in the Tiananmen Square uprising in 1989, then fled China, earned business and law degrees at Columbia University and for the past 13 has run an investment firm called Himalaya Capital. He’s been an informal adviser to BYD and traveled to Omaha with Mr. Wang. Li Lu now lives and works in Pasadena, Ca., where we met last week.

The most important thing to know about BYD—the letters are the initials of the company’s Chinese name, but they have come to stand for Build Your Dreams–is that the company has enormous ambitions. It aims to be not only the world’s biggest carmaker, but a leader in cheap solar power and utility-scale battery storage as well. Mr. Wang, the founder and chairmen, has said that he believes that the automobile and energy industries are on the verge of a major transformation. Buffett, Munger and Sokol all told me that they were really impressed with Mr. Wang–not a bad trio of endorsements.

BYD’s been in the news lately for three reasons. In March,  the company announced a joint venture to develop electric cars in China with Mercedes. The idea is to combine Mercedes’ design excellence with BYD’s technological savvy, particularly with respect to batteries, and the Chinese firm’s access to its home market. “Daimler’s know-how in electric vehicle architecture and BYD’s excellence in battery technology and e-drive systems are a perfect match,” Mercedes chief Dieter Zetsche said at the time.

Last month, BYD announced that it will open its North American headquarters in a downtown neighborhood of Los Angeles. Mr. Wang was joined by California Gov. Schwarzenegger and LA Mayor Villaraigosa at the ceremony and, interestingly, the company said it would put more than its electric cars on display—it will showcase “solar panels, energy storage systems and advanced LED lighting products” as well.

To lure BYD, the city of Los Angeles promised to buy some of the company’s electric vehicles, including buses; to  streamline the approval process for installing charging stations in garages; to make it easier for people to install charging stations in their homes and to display a BYD car at LAX, according to the Wall Street Journal.

Third, BYD and KB Homes, the big homebuilder, announced that they would build homes together that not only include solar panels on the roof but batteries in the garage–so that the owners can enjoy solar-powered electricity even when the sun’s not shining. This is a big deal, as the Sunpluggers blog reported:

Off-grid solar owners for many years have used battery banks to store their generated electricity for later use, but the plan for the KB Home development – smack in the middle of a grid-tied suburban subdivision – could help alter the trajectory for adoption of both solar electricity and plug-in vehicles.

BYD is already growing fast, as Li Lu reminded me. It has about 160,000 employees, most in Shenzhen and Xian in  China, but others at offices in the Netherlands, Denmark, Hungary, Romania, Japan, South Korea, India, Taiwan and Hong Kong. (There’s even an office in Shaumburg, Illinois, where Motorola is a big customer for BYD’s batteries and handsets.)

BYD sold about 450,000 vehicles in 2009, up 170 percent from a year earlier, and it intends to sell about 800,000 this year, nearly all of them gasoline powered. The company’s all-electric car, called the e6,  is currently running as taxi in Shengzhen in small volumes. Rollout is slightly behind schedule, but more are expected to be produced this year.  Unlike the U.S., China has yet to lay out a policy for subsidizing electric cars, which has slowed things down. The car will cost about $40,000, the company has said. It hasn’t talked about a timetable to bring the car to the U.S. or Europe, which could be a big export market because prices there are high.

Li Lu

“The big challenge now is to bring down the initial cost,” Li Lu told me. Eventually, BYD would like  to sell the car for about the same price as conventional vehicles, and win over auto buyers by offering them lower operating costs and higher performance. “The only way to conquer this market is to provide a product that is comparable at the beginning and superior in the end,” he said.

BYD’s greatest strength is in battery technology, the company’s first business. Manufacturing a safe, reliable, long-lasting, and fast-charging battery for a car at an affordable price is a complex and costly undertaking. The Chinese firm believes that it has an edge over its rivals.

“There are not many in the world that have comparable experience and expertise,” Li Lu says. “They seem to have  a commanding lead right now.” The BYD technology is super safe, its batteries will last a long time and they will cost less than competitors, he said.

All that remains to be seen, of course. But BYD has not one but three opportunities to change the world–with its electric cars, its rooftop solar panels with battery storage and with large-scale batteries that could be used by electric utilities to store solar or wind power.

If BYD succeeds in even one of those businesses—let alone all three—it will become one of the most important clean tech companies in the world.

As Washington debates climate change, a lot of utility company CEOs have assumed high-profile roles: Jim Rogers of Duke Energy is appearing in commercials with the Environmental Defense Fund, David Crane of NRG Energy has emerged as a leading advocate for nuclear power and Michael Morris of American Electric Power, the nation’s biggest coal-burning utility, naturally talks up clean coal.

David Sokol, the chairman of an Iowa-based utility holding company called MidAmerican Energy Holdings, which is 80%-owned by Warren Buffett’s Berkshire Hathaway, has for the most part been quieter. But Sokol and MidAmerican Energy have been positioning their business for a low-carbon future. MidAmerican’s investments in wind power mean that it generates more power from renewable source than any other regulated utility, as best as I can tell. It was Sokol, at Buffett’s request, who engineered MidAmerican’s investment in BYD, the Chinese battery-maker and auto company that is building low-cost electric cars. (See Warren Buffett Takes Charge, my story about BYD that ran last month in FORTUNE.) And now there’s more news from MidAmerican, and you heard it here first: The company will soon begin testing batteries from BYD that, if all goes well, could store electricity on a large scale at a reasonable cost.

That’s a big deal.

“We’ve never really had storage capability on utility systems,” Sokol told me recently, by phone. “Given the progress BYD has made on the technology of batteries for electric vehicles, the question is, how do we ramp that technology up so that we can use it for multiple purposes in the utility world?

“Probably the most obvious is the ability to store intermittent renewable resources, such as wind or solar,” Sokol said.

Put simply, cheap battery storage at scale would address one of the biggest drawbacks to wind and solar energy, which is that, unlike coal or nuclear power, they are unpredictable—you can only make electricity when the wind is blowing or the sun is shining.

“If you can store electricity when the wind blows, and have it available when you need it, that argument goes away,” Sokol says. But he cautions: “There’s a fair bit of distance between here and there.”

Just a few details: This fall, MidAmerican will build a 2 megawatt storage facility using BYD batteries at an existing substation in Portland, Oregon, where it operates the local utility, Pacific Power. BYD, meanwhile, is building a bigger storage facility in China, and plans to build a third one in a still-undisclosed location on in southern California. That’s about all I can tell you because BYD is reluctant to talk about its research.

The 2 megawatts of battery storage in Portland will allow MidAmerican to test BYD batteries to see how well they charge, what control systems are needed to discharge the electricity and to analyze their reliability and cost. “It will let us do a fair amount of testing to understand the economics of a 100 or 200 megawatt storage facility to back up wind,” Sokol says.

Currently, electricity can’t be stored economically on a large scale except in systems that pump water uphill, then release it to generate hydropower. So-called pumped-storage systems, however, often consume more energy than they generate; they make sense only because water can be pumped uphill using cheap off-peak power, then released so the electricity can be sold during periods of peak demand when prices are higher.

Low-cost battery storage would be a dramatic improvement over pumped storage for many reasons, not the least of which is that the batteries could be located in urban areas where electricity demand is high.

Sokol has credibility when he talks about energy and environmental issues, in part because of his association with the plain-spoken Buffett but mostly because of MidAmerican’s own track record. “For the last six years, we have been very focused on trying to move our overall portfolio to the lowest carbon footprint possible,” he says. “We’re building every wind and geothermal project that we are able to.” A thoughtful and unpretentious Omaha native, Sokol is a student of business and author of a slim and insightful volume of management advice called Pleased But Not Satisfied. MidAmerican, whose subsidiaries provide electricity and natural gas to nearly 7 million customers in the Midwest, Pacific Northwest, Rocky Mountain states and the UK, had about $12.7 billion in revenue last year.

About 24 percent of MidAmerican’s generating capacity now comes from renewable or noncarbon fuel sources, including wind, geothermal, hydroelectric and biomass. About 50% comes from burning coal, which is about the same as the U.S. average, but its PacifiCorp subsidiary caused a stir back at the end of 2007 when it said it would scrap plans for new coal-fired power plants in Wyoming and Utah, in part because of concerns about climate change.

When we met last December in New York, Sokol explained to me that he is a big believer in electric cars because electric engines are far more efficient than those that burn gasoline. An all-electric vehicle–even one powered by today’s U.S. mix of electricity generation—produces about 20% of the greenhouse gas emissions of a gasoline-powered car that gets 20 miles per gallon. As battery prices come down, electric cars will be both cheaper to drive and cleaner than today’s fleet. Just this week, BYD and Volkswagen agreed to work together on electric cars.

Sokol nevertheless opposes the Waxman-Markey climate change bill approved last week by the House energy committee. In an opinion piece in The Washington Post, he wrote that the legislation will place an undue burden on consumers because it requires utilities to pay for allowances to emit CO2 and creates a complex and unnecessary trading scheme:

The real hidden catch of the cap-and-trade system, though, is that it will require consumers to pay twice: first for emission allowances and then for the construction of new low- and zero-carbon power plants.

Sokol did say, however, that the electricity sector can achieve the 83% reduction in greenhouse gas emissions by 2050 mandated by the bill. Getting there will require advanced technologies like the electric cars, large-scale batteries and solar photovoltaic panels being developed by BYD.

Founded in 1995, BYD now employs 130,000 people in 11 factories, eight in China and one each in India, Hungary, and Romania. If nothing else, the company has demonstrated that it can move fast. “Working with them,” Sokol says, “is sort of like watching bamboo grow.”

If you think the American auto industry is in trouble now, just wait until the Chinese learn how to make great cars. And if you doubt that they will learn, check out my cover story about BYD in the new issue of FORTUNE, headed to subscribers and newsstands this week.

BYD is an amazing company. It was started by a chemist and government researcher named Wang Chuan-Fu in 1995 (same year as Yahoo) to make rechargeable batteries, which it learned to do very well. Within a few years, BYD’s batteries were cheaper and just as reliable as those made by industry giants ony and Sanyo. Then Mr. Wang, as he’s known, got into the automobile business by buying a failing state-owned carmaker. BYD’s conventional gas-powered cars are selling well these days in China, and his electric plug-in electric model looks like it will come to market with a longer range and a lower sticker price than the new Toyota Prius much-hyped Chevy Volt. As if that were not enough, I’m hearing now that BYD is on the verge of a breakthrough in the solar power business and that the company has big plans to make rechargeable batteries at a utility scale to store energy from intermittent, renewable sources like wind and solar. Today, BYD employes 130,000 people in 11 factories, either in China and one each in India, Hungary and Rumania.

That track record—and that potential—is what persuaded Warren Buffett’s company, Berkshire Hathaway, to buy 10% of BYD last fall for $230 million. This could turn out to be one of Buffett’s very best deals. Here’s what Charlie Munger, Buffett’s longtime friend and the vice chairman of Berkshire, told me about Mr. Wang:

This guy is a com-bination of Thomas Edison and Jack Welch—something like Edison in solving technical problems, and something like Welch in getting done what he needs to do. I’ve never seen anything like it.

Munger, by the way, is a famous curmudgeon, who usually comes up with all kinds of reasons why Buffett’s latest investment idea won’t pan out. Not so this time around.

The other key player in the Berkshire-BYD deal is David Sokol, the chairman of MidAmerican Energy, a utility company owned by Berkshire and an interesting guy in his own right. (I’m going to blog about Sokol later this week—he is a big believer in renewable energy.) Sokol did most of the due diligence on BYD for Berkshire, and he now sits on the BYD board. He, too, was very impressed with Mr. Wang.

Here are three reasons why I think BYD will become an important company in the not too distant future.

1. BYD’s engineering prowess. Depending on whether or not you count trainees, BYD employs between 10,000 and 17,000 engineers and it’s constantly recruiting the best graduates from China’s engineering and technical schools. The Shenzhen manufacturing region, where the company is headquartered, is known for cheap unskilled labor, but BYD’s competitive advantage derives from its cheap skilled labor. “They are the top of the top,” Mr. Wang told me, when I visited BYD last year. This is a company that has already invented new processes (the way it makes batteries) and products (the battery in its electric car) and it is focused on innovation. Innovation appears to be Mr. Wang’s personal passion.

2. BYD’s forward-thinking management. David Sokol is a student of management—he wrote a little book on the subject called “Pleased But Not Satisfied”—and he was impressed with Mr. Wang’s thoughtful and purposeful approach to building his company. So was I. Not many entrepreneurs evolve into effective leaders of global companies with 100,000 or more employees. This fact didn’t make the story, but I was interested to learn that BYD is working with the Hong Kong outpost of Business for Social Responsibility. Unlike some of its domestic competitors, BYD wants to adopt best practices in health and safety as well as find ways to empower its people to improve the company. Jeremy Prepscius, the Asia director for BSR, told me: “What makes them unique is that you have a Chinese company, a big one, that recognizes the value of continuing to evolve its internal culture, and recognizes that it is not just a top-down command-and-control culture…They are somewhere between an old state-owned Chinese enterprise and a modern Japanese company like Toyota.” Sokol told me that Mr. Wang seeks his ideas and criticism whenever they meet. Perhaps surprisingly, many CEOs have the confidence to act that way. On the downside, it’s hard to know whether BYD has a strong bench of managers behind Mr. Wang.

3. China’s commitment to clean energy. Much as I admire the Obama administration’s energy and environment team, there’s no way that the U.S. government is going to help U.S. car companies and battery makers as much as the Chinese government is going to help BYD. As Keith Bradsher of The New York Times reported in a page-one story earlier this month:

Chinese leaders have adopted a plan aimed at turning the country into one of the leading producers of hybrid and all-electric vehicles within three years, and making it the world leader in electric cars and buses after that.

The government will make direct grants to automakers (as we do, of course) and also provide “subsidies of up to $8,800 are being offered to taxi fleets and local government agencies in 13 Chinese cities for each hybrid or all-electric vehicle they purchase.”

Finally, there’s a fascinating footnote to this story, and it involves a man named Li Lu, who was born in China in 1966, the same year as Mr. Wang. When I began reporting the story, I wondered how Buffett and Charlie Munger had become aware of BYD. That question led me to Li Lu, who runs an investment firm, in which Munger is an investor, based in Pasadena that owns about 2.5% of BYD. He was the link between Berkshire and BYD.

Li Lu, it turns out, also was a leader of the pro-democracy movement that organized the mass student protests in Tiananmen Square in 1989—20 years ago next month. He fled China after hundreds of demonstrators were killed and appeared on China’s “Twenty-one Most Wanted List.”

Escaping to New York, Li Lu was embraced by the human rights community and wrote a memoir called Moving the Mountain that reads like a movie. His well-educated parents were forced into labor camps during the Cultural Revolution and, as a 10-year-old-boy, he barely survived an earthquake that killed 250,000 in the city of Tangshin.

During the 1990s, Li Lu earned three degrees in six years from Columbia—a B.A. in economics, a law degree and an M.B.A. He worked for Allen & Co. and at Donaldson, Lufkin & Jenrette before starting his investment fund. When David Sokol first flew to China to visit BYD, he stopped at LAX to have dinner with Li Lu, after which they traveled together to Hong Kong. Li Lu is still not permitted to travel freely to China.

Li Lu politely declined to speak with me for my story, telling me that some people in China are still unhappy about his role in the Tianenmen protests. Mr. Wang is not among them. “That’s past history,” he said. “Today, Mr Li and I share the belief that the best way to help China move forward is to make BYD a world-class company.”

Li Lu has agreed to come to FORTUNE’s Brainstorm Green conference next week to talk about BYD. I’m eager to meet him and learn more about this remarkable company. You can read my BYD story here.

I’d ordinarily be reluctant to take on Warren Buffett and the Girls Scouts of America in a single blog post, but this story is too good to pass up. Have you heard? Dairy Queen, which is a unit of Buffett’s Berkshire Hathaway, struck a deal with the Girl Scouts to incorporate the Thin Mint, the best-selling of the Girl Scout cookies, into one of its Blizzards, an ice-cold drink.

The result of this ill-advised merger, according to a news release from DQ and the scouts, is a

A creamy soft serve blended with Girl Scouts Thin Mint Cookie pieces and a Crème de Menthe topping to create this summer’s blockbuster – the DQ® Girl Scouts Thin Mint Cookie Blizzard.

Have they not heard about America’s obesity crisis?

The nonprofit Center for Science in the Public Interest couldn’t resist this story either. Their nutritionists analyzed a Thin Mint Cookie Blizzard—which weighs more than a pound!—and found that it contains more than 1,000 calories, an astonishing 31 teaspoons of sugar and more than a day’s allotment of saturated fat.

I think I’m going to be sick.

The folks at CSPI had some fun with this. Here’s an excerpt from their press release, quoting from the announcement from the Girls Scouts:

“Our partnership with Dairy Queen enables us to reach the public in new and unexpected places,” said Laurel Richie, who holds the position of “chief marketing officer” of the Girl Scouts of the USA, in a press release. Those “unexpected places” will include the waistlines and coronary arteries of at least 10 million people by the end of the month if the company meets its projections. Dairy Queen is on track to sell that many Thin Mint Blizzards by the end of July it told USA Today, but the chain and the Girl Scouts are both mum on how much money has changed hands.

CSPI executive director Michael F. Jacobson went on to say that “renting out its nonprofit brand name to a junk-food chain is a major badge of shame for the Girl Scouts.”

I dearly hope this isn’t a trend among corporations and nonprofit groups. Business-NGO partnerships can be good for all—think about the Avon walks for breast cancer research or the support that American Express lent to Share our Strength. But they become risky business when a nonprofit with a trusted brand lends its name to a company with a spotty record. The Sierra Club, for example, earlier this year endorsed a new line of “green” cleaning products from Clorox, even though the company continues to sell other cleaning products that are not as good for your health or the environment.

But this DQ-Girl Scouts deal takes the cake (yes, you can have the Thin Mint Blizzard as an ice-cream cake, too) because the product runs counter to the mission of the Girl Scouts. The group’s own website says that its advocacy program “encourages healthy living and combats obesity.” Crazy. To be sure, there’s nothing wrong with blizzards, burgers and shakes, so long as they are consumed in moderation. But given the unhappy reality that millions of Americans seem unable to moderate their eating habits (or to get off their big butts to exercise a few times every week), it’s the responsibility of big food companies to help solve the obesity crisis, not make it worse. Even Ben & Jerry’s now sells low-fat frozen yogurt.

And if you disagree with me that the obesity crisis is partly the responsibility of corporate America, surely you agree that a service organization like the Girl Scouts out to take the issue seriously. Instead, they give us the Thin Mint Blizzard, about a good a way as you could imagine to promote obesity and Type-2 diabetes to girls. Is there a merit badge for selling out?