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Aug. 14--NetJets will move its corporate headquarters to Columbus in the wake of the departure last week of longtime CEO Richard Santulli, a spokeswoman confirmed yesterday.
Meanwhile, Daniel Rosenthal, previously the highest-ranking executive in the Columbus office of NetJets, has left the company in an executive shuffle following Santulli's exit.
Rosenthal, who has become active in civic organizations such as the Columbus Partnership and the Ohio Business Roundtable, declined to comment last night.
Santulli pioneered the concept of fractional jet ownership, allowing companies and individuals to buy a timeshare-like portion of a private jet. NetJets' client list includes sports figures and celebrities, in addition to executives. He sold the company to Warren Buffett's Berkshire Hathaway in 1998.
The headquarters was located in New Jersey, where Santulli lives, but NetJets for years has had its operational headquarters near Port Columbus.
Santulli resigned abruptly last week and was replaced on an interim basis by David Sokol, CEO of Iowa-based utility MidAmerican Energy Holdings Co., another Berkshire Hathaway company. Sokol is considered a leading candidate to replace Buffett someday.
The decision to move NetJets' headquarters to Columbus is being warmly received locally.
Kelly Schlissberg, a spokeswoman for the Ohio Department of Development, said the state is "very happy" about the news.
"We appreciate the level of confidence and satisfaction in Columbus that they're showing in locating their corporate headquarters here," Schlissberg said. "Having a large corporate headquarters like NetJets' certainly doesn't hurt as far as visibility for the city and the state."
Less than two years ago, NetJets' future in Columbus was in doubt as the company, contemplating expansion, said it was looking at other cities to do so. But NetJets announced in March 2008 that it would stay in Columbus and build a new $200 million campus next to Port Columbus. Company officials said the project would add 600 jobs in addition to the 2,000 jobs currently in Columbus.
Not much tangible has happened yet, and details have been kept quiet.
The only portion under way is an expansion of the NetJets tarmac being provided by the Columbus Regional Airport Authority. Robin Holderman, vice president of real estate, said that work should be done by the end of the year.
NetJets and the airport have continued to work with the Federal Aviation Administration on site plans, but they have not shared any further details. Asked about the project in March, NetJets spokeswoman Maryann Aarseth said only that the company was moving ahead with plans "at the appropriate size and scope."
NetJets was originally founded as Executive Jet in Columbus in 1964, but its corporate headquarters with a very small number of employees moved to Woodbridge, N.J., where Santulli lives, after he purchased the company in 1984.
Business aviation has been left reeling by the recession. NetJets lost nearly $350 million during the first six months of 2009, as sales slowed to a crawl, existing owners sold back their shares and aircraft values plummeted. Aviation consultants say the recession is just one factor, as business jets have been vilified by politicians.
"There are companies that won't touch a business jet today, because it's considered one of the tools of greed and evil," said Michael Boyd, head of Evergreen, Colo.-based consultancy the Boyd Group. "This is going to get worse before it gets better. The whole industry has been decimated: Manufacturers have closed entire factories and laid off thousands of workers."
Some have suggested that Santulli endeared himself to employees but not to management by not reducing costs deeply and quickly enough. In June, the company said it had been able to avoid the involuntary pilot layoffs that its competitors have all undertaken by offering pilots voluntary measures including early retirement and unpaid leave.
"Anyone in this business is going to have to shrink with the industry," Boyd said. "It's a smaller business than it was two years ago, and I think it's going to remain that way for at least the next three or four years."
