NetJets Unrest Puts Warren Buffett in a Rare Pinch

[Omaha Steve]

Pilots Protest Against Pay, Benefits at Berkshire Hathaway’s NetJets

Video: http://www.wsj.com/video/netjets-unrest-puts-warren-buffett-in-a-rare-pinch/91F109C4-061C-4D73-A5FD-A6759012DAFD.html

Story>> http://www.wsj.com/articles/netjets-unrest-puts-warren-buffett-in-a-rare-pinch-1420485740

By ANUPREETA DAS
Jan. 5, 2015 2:22 p.m. ET

On a Saturday in mid-November, NetJets Inc. hosted several hundred of its wealthiest customers in the ballroom of the luxury Wynn resort in Las Vegas, where guests played poker alongside Warren Buffett with $950,000 in prizes at stake.

Outside, dozens of uniformed NetJets pilots picketed against the private-jet company. “Management greed is destroying NetJets,” read one placard. “Do pilots need to pay more for healthcare so you can fly cheaper?” asked another.


A banner hangs near a NetJets jet in Omaha. NetJets, the aviation business of Berkshire Hathaway, has faced increasing labor unrest in recent months. PHOTO: BLOOMBERG NEWS


Labor unrest is unusual for a company owned by Mr. Buffett’s Berkshire Hathaway Inc., where the prevailing image is that of a conglomerate with well-paid managers who oversee contented workers at more than 70 operating subsidiaries. But the drama playing out at NetJets illustrates the hard side of Mr. Buffett’s singular focus on returns. In the case of NetJets, the pressure to complete the turnaround of a business Mr. Buffett once called his “number one worry” is now spilling into public view.

The Las Vegas protest was part of a deteriorating labor situation that now has employees accusing management of illicitly accessing an online portal where NetJets pilots communicate. If the conflict isn’t resolved soon, it could become the latest headache from a company that has been a periodic source of worry for Mr. Buffett. In the 16 years that Berkshire has owned NetJets, the jet operator has never paid its owner a dividend, and its net worth is considerably less than the $725 million Berkshire paid for it in 1998, a person close to the company said.

FULL story at link. Are U glad OS covers the labor beat?

[PoliticAverse]

1. “Investors have poured their money into airlines and airline manufacturers for 100 years

with terrible results,” “It’s been a death trap for investors,” - Warren Buffett.

From: http://www.thestreet.com/story/11914749/1/buffett-planes-trains-and-investment-pains.html

[stevenleser]

2. This will not end well.

It's one thing if the owners were taking large dividends and the company was doing well.

This sounds like the company is circling the drain. I wish the workers well, at whatever company they end up working. NetJets doesnt sound like it will survive.

[PoliticAverse]

4. From the article "NetJets’s profit rose 7% in 2013.".

We won't know what happened in 2014 until Berkshire releases info in February.

[PoliticAverse]

3. Note that NetJets was involved in a long tax-dispute with the IRS...

See: http://www.huffingtonpost.com/2012/03/06/warren-buffett-jet-company-_n_1313351.html