Buffett’s NetJets Lures Its Former Leaders Back as Hansell ExitsNoah Buhayar
NetJets, the luxury aviation unit at Warren Buffett’s Berkshire Hathaway Inc., said Chairman and Chief Executive Officer Jordan Hansell stepped down and was succeeded by two executives who had recently left the company.
Adam Johnson, 44, was named CEO and chairman, Columbus, Ohio-based NetJets said Monday in a statement. Bill Noe, 50, takes over as president and chief operating officer of the business, which sells fractional ownership of jets to wealthy individuals and corporate clients in exchange for flight time.
“Putting these experienced NetJets leaders into new roles underscores the company’s commitment to both owners and employees,” NetJets said in the statement.
Johnson joined NetJets in 1996 and rose to president, with responsibility for marketing, sales and owner services. He resigned effective May 1, and was persuaded to come back, said Christine Herbert, a spokeswoman for the Berkshire unit.
Noe is returning to NetJets after more than two decades of experience at the company. He had left about two months ago for a job at General Electric Co., according to Herbert. The Columbus Dispatch in Ohio reported earlier that both executives had returned to NetJets.
The business has caused Buffett frustration since he bought it in 1998 for $725 million. David Sokol, a top deputy, replaced founder Richard Santulli in 2009 amid the financial crisis and resurrected an operation that Buffett later said “was destined for bankruptcy, absent Berkshire’s deep pockets.”
Sokol’s stint wound up being short. He resigned from Berkshire in 2011 after buying shares of a company and then recommending it to Buffett as a possible takeover target.
Hansell, 44, a lawyer who took over the unit, struck deals with aircraft manufacturers to refresh NetJets’ fleet.
“For his hard work and his success in leading NetJets through a very tumultuous economic period, Jordan has earned our sincerest thanks and best wishes for his next endeavors,” Johnson said in the statement.
QuickInsured LLC, a Columbus-based insurer that sells policies online, named Hansell executive chairman, according to a statement on Monday. He is a founding investor in the company and has been a board member since last year.
The change at the top of NetJets could shake up labor discussions at the unit, which have grown more heated in recent years. Unions representing pilots and other employees have said they weren’t rewarded for NetJets’ rebound and have sought to pressure the company by taking out newspaper ads and protesting at Berkshire’s annual meeting in Omaha, Nebraska.
The union representing more than 2,700 NetJets pilots welcomed the new leadership, saying Johnson and Noe bring needed experience in management and labor relations.
“We hope they share our goal of rebuilding a once progressive labor-management relationship,” Pedro Leroux, president of the NetJets Association of Shared Aircraft Pilots, said in a separate statement.
The amount of management turnover is rare for a unit at Berkshire. Buffett engenders deep loyalty from the heads of the dozens of operating businesses he’s bought over the past five decades and pledges to hold onto the subsidiaries forever.
That approach has helped build Berkshire into one of the largest companies in the world. Its operations include insurers, manufacturers, retailers, electric utilities and one of the largest U.S. railroads. Even though NetJets is one of the more widely known brands in the portfolio, it’s not a large contributor to the company’s profit, which was almost $20 billion last year.
“If this was a normal company, you’d think they’d consider getting rid of this business,” Cliff Gallant, an analyst at Nomura Holdings Inc., said of NetJets. “It’s created more headaches than it’s worth.”
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