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| Carl Hirschmann, David and Philipp Degen |
In 1967, Carl Hirschman Senior bought a hangar on Basel Airport (then Airport Basel-Mulhouse; now Euroairport Basel-Mulhouse-Freiburg). He started a business for the maintenance of company owned jet aircrafts. Through careful acquisitions and expansion first into Saudi-Arabia and later into the US he established Jet Aviation as the world’s leading private maintenance company.
The establishment of the company in Basel with its premises on the airport was intentional. The airport in Basel is bi-nationally owned by Switzerland and France. With this placement, the company was able to hire people for its operation that under Swiss or French law wouldn’t have received work permits. All it took was some squiggling around.
Carl Hirschmann Sen. was very thrifty in his business dealings. His human resources department came up with a ploy whereby British citizens could be employed without paying taxes in either Switzerland or France. These employees usually only found out about the draw-backs when they returned to Britain and faced huge tax bills. But Jet Aviation had been able to employ them with cut throat low wages.
When Carl Hirschmann died in 1995, a full page obituary was placed in the Wall Street Journal. If you have led a life free of blame, you normally leave the writing of an obituary to the living. Carl Hirschmann Sen. didn’t take any chances, though, and had it ready for the day. It contained the revealing sentence ‘I do not choose to be a common man.’ Charmed, I’m sure.
What he left behind was a very common, rich, and divided family. The company was run by his son Thomas Hirschmann, a competent administrator without much vision. His obvious successor Carl Hirschmann Jun. had been kicked out of the company in 1983 over the trifling dispute over the use of a company car. The company’s shares were divided between his widow and his five children opening interesting vistas for all kinds of alliances in a family at odds.
In a first alliance, Thomas Hirschmann finally managed to get rid of the old board of directors of his father’s cronies in 2005 and to replace them with business people from the aviation sector. The new board was headed most notably by Moritz Sutter, founder of Crossair (signing these days as Swiss). The board’s business was to streamline the company into the success it had been under Carl Hirschmann Senior. The unwelcome news of the new boards for the family was that this would mean no dividends for some years to come.
As all the family constantly lived above their income, namely the widow with houses and estates scattered over half of Europe, this was simply impossible to bear. What cheek! A new alliance formed, and the new board was sacked after only six weeks in office and replaced with the widow herself and her cronies. For good measure, Thomas was kicked out as CEO as well.
The new board finally came to an agreement with Permira Funds over the sale of the company, whereby Carl Hirschmann Jun. retained his part of the shares. It is thought that the family cashed in almost a billion dollars for their 90 percent share (without Carl’s part). With Permira, Carl Hirschmann Jun. entered the board and even had a go as CEO ad interim during a crisis. Permira Funds sold the business in 2008 for 2.25 billion dollars; Carl Hirschmann Jun. was amply rewarded for his waiting. Three years had more than doubled the worth of his shares.
Carl Hirschmann Jun.’s son Carl Hirschmann is a walking calamity in his own right. I have followed his exploits in many articles.
Originally published on Triond on 17/08/10.
Further reading
When a Sassy Headline Becomes an Embarrassment
Carl Hirschmann: Poor Rich Boy
Carl Hirschmann Repeat Performances
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