Sympathy for Sokol
I have to weigh in here and explain why I can’t help being sympathetic toward David Sokol. One reason is simply because he is the presumptive successor to Warren Buffett, not the "heir apparent." An heir apparent can only be displaced by a cataclysmic and almost inconceivable event, such as dethronement of Buffett. An "heir presumptive" can be displaced at any time by any number of events, the main one being the arrival on the scene of new heirs.
Lately, Buffett's eyes have lit up whenever he mentions Matt Rose of BNSF and Steve Burke of Comcast. Worse, Burke just joined the Berkshire board. There is a long tradition at Berkshire of Buffett downgrading or discarding his past favorites when he gets fascinated with somebody new. Fortunately, like Ajit Jain, Sokol can remain a hero to Buffett as long as he makes Berkshire a ton of money.
That leads us to the second reason I feel so much sympathy for Sokol: he has to run NetJets. To Sokol, it probably seemed like a great opportunity at the time. It expanded his responsibilities to something that began to resemble the role of chief operating officer. Executing a successful turnaround could cement the CEO job.
But Sokol is now stuck in a highly unenviable position. The financial realities of NetJets in the current global economy are such that it’s going to be immensely hard to pull off a heroic turnaround and make Buffett a ton of money. Based on some research I have been doing this is probably true despite a recent statement by Buffett to the contrary. Some kind of limp-along solution that contains the damage may be the best that can be hoped for. NetJets' losses are bad enough already that it essentially is a zero-sum game, in which one way or another, someone must be blamed.
You can see why, under those circumstances, there would be incentive for Buffett to pin everything on Santulli. As happened with Salomon, the most convenient way to explain a mess is to blame departed management. That way, everybody who is still around can look like a hero. If it is not all Santulli's fault ... a chunk of the blame goes elsewhere.
It must have seemed like a godsend to Buffett that Sokol volunteered to step in and do the “turnaround,” which gave Buffett one more degree of separation from the unlovely mess.
I sincerely feel for Sokol. This cannot possibly be what he envisioned when he took on the job.