(BRK.A), (BRK.B)
NetJets’ ongoing labor issues took a big step forward as the International Brotherhood of Teamsters Local 284 and NetJets Aviation reached a tentative agreement on a new contract for the 278 flight attendants represented by the union.
The agreement is being hailed as containing “substantial” pay increases and is being called “mutually beneficial.” The union said the terms include:
• A $2.8 million ratification bonus that will equal approximately $80 per month of service for all flight attendants.
• Substantial pay increases for all flight attendants at all seniority levels.
• New 18-year pay scales, increasing from prior 10-year scales.
• The ability to use sick days as personal days.
• New schedule choices.
• Increased flight attendant basing opportunities.
Work on a final agreement will begin during the week of October 12.
Change in Leadership Brings Progress
On June 1, 2015, Berkshire Hathaway, the owner of NetJets, dismissed NetJets CEO and chairman Jordan Hansell, replacing him with Adam Johnson, who had spent 22 years at NetJets. At the time, there was hope of a breakthrough with NJASAP, the labor union representing the approximately 2,700 pilots employed by NetJets.
While some progress was made during a 90-day summer ceasefire that included an expedited bargaining schedule with the intent of reaching a tentative agreement, the two sides were still at loggerheads over wages, retirement and health care benefits. NJASAP resumed its picketing, noting that the union and management were still far apart.
In September, 800 pilots and their family members picketed at seven picket sites across the country.
Now, with the breakthrough agreement with the flight attendants’ union, there is at least a glimmer of hope that NetJets might settle its contract dispute with its pilots. NetJets and NJASAP have been engaged in contract negotiations since June 2013, and, in early May 2015, began bargaining with the assistance of a National Mediation Board-appointed mediator.
Berkshire Hathaway purchased NetJets, the leader in fractional jet ownership, in 1998 for $725 million.
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© 2015 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.