NetJets names new CEO in midst of labor dispute with pilots
OMAHA, Neb. – Berkshire Hathaway’s NetJets unit rehired two longtime executives to lead the company in the midst of an ongoing contract dispute with its pilots union.
NetJets, which sells partial ownership interests in business jets, said Monday Jordan Hansell is stepping down as chairman and CEO.
A group of NetJets pilots protested outside Berkshire Hathaway’s annual meeting in May because they object to the concessions NetJets has been seeking since 2013 in contract talks.
Previously, Berkshire’s CEO Warren Buffett had praised Hansell’s cost-cutting leadership of NetJets since 2011. Buffett didn’t immediately respond Monday to questions about the changes.
Hansell had been NetJets’ general counsel before he took over the top job at the firm in the wake of David Sokol’s sudden resignation in 2011. Sokol had been one of Buffett’s top executives before questions were raised about him buying stock in a company Berkshire later acquired.
Hansell continued the tight cost controls Sokol established at NetJets because the demand for private jets fell during the recession. Hansell also helped NetJets gain access to the Chinese market.
“NetJets is very well positioned for future success and to grab hold of the opportunities before it,” Hansell said in a statement that didn’t address his plans.
The NetJets pilots union said the benefit cuts the company is demanding from it 2,700 pilots are unwarranted because NetJets is more profitable now that the economy has improved. The union and NetJets are meeting with a federal mediator to try and resolve the dispute.
Union President Pedro Leroux said he’s optimistic about the change, but it won’t be clear immediately whether NetJets’ position on contracts will shift.
“I think it’s a good change for NetJets and the employee groups,” Leroux said.
The union has had good relationships with both of the new leaders in the past, and Leroux said he appreciates their background in operations.
Berkshire said NetJets contributed to a nearly 10 percent jump in revenue from its service businesses last year, but it didn’t break out NetJets results in detail. Berkshire said NetJets’ earnings improved in 2014 because revenue grew and it had lower restructuring, aircraft impairment and finance charges.
Buffett said at Berkshire’s annual meeting that he’s confident NetJets will eventually reach a contract agreement with its pilots. Buffett said NetJets pilots’ compensation is competitive and plenty of pilots from other companies want to join the company.
NetJets said Adam Johnson will become chairman and chief executive of the Columbus, Ohio, firm. Bill Noe will be president and chief operating officer. Both men are longtime NetJets executives who had left the company this spring to pursue other opportunities.
“NetJets has been my passion for nearly two decades,” said Johnson, who worked in marketing and operations at NetJets from 1996 until April. “I am truly humbled – and excited – about the opportunity to lead this extraordinary company and its people and to contribute to its success.”
Noe came to work at NetJets as a pilot in 1993 and worked his way up to chief operating officer. Noe said he’s looking forward to being able to influence every aspet of the company in his new role.
NetJets is one of more than 80 companies Omaha, Nebraska-based Berkshire Hathaway owns. NetJets has a global fleet of more than 700 aircraft and nearly 6,400 employees.
Berkshire eclectic mix of companies includes Geico, General Re, BNSF railroad, Dairy Queen and others. Berkshire also holds big investments in companies like the Washington Post Co., Wells Fargo & Co., International Business Machines Corp. and American Express Co.