Jimmy Haslam knows who will succeed him as CEO of the Pilot Co., the nation’s largest network of truck stops. In a few months, so will everyone else.
After 43 years in the business, weathering a fraud scandal that led to federal convictions of Pilot’s former president and others, and overseeing expansion of the truck stop and energy business, Haslam will likely remain chairman of the $31 billion privately held company.
“I’ll be 66 in March. We have a succession plan in place that we’ll announce later this summer,” he told FreightWaves at the recent NATSO Connect gathering of truck stop operators and suppliers in Denver.
Haslam joined the company board at age 20 in 1975 when annual sales were around $50 million.
The billionaire owner of the Cleveland Browns NFL team is selling 41% of the Pilot Co. — recently renamed from Pilot Flying J — to Berkshire Hathaway Inc. in 2023. The multinational investment group will then have 80% control of the company Haslam’s father started with the $6,000 purchase of a single gas station in 1958.
The coming C-Suite change “has nothing to do with Berkshire,” Haslam said. “I’ll remain active in the company for a long time.”
Haslam’s post-sale fortune likely will grow from Forbes’ current $2.9 billion estimate. That figure includes his controlling stake in the Browns — a team that, despite limited on-field success, is now worth about $1.2 billion, according to Forbes, as compared with the $900 million controlling stake Haslam purchased in 2012.
The search for Haslam’s successor is an internal affair about which he offered no hints.
The Pilot executive team appears to have numerous candidates, including President Ken Parent, who oversees daily operations and has been at Pilot since 1996. Haslam’s daughter, Whitney Haslam Johnson, is chief experience officer. Relative newcomer Shameek Konar is chief strategy officer, hired in 2017 to grow Pilot’s energy business.
Pilot operates a chain of 750 travel centers under the Pilot and Flying J brands along with smaller regional brands plus diesel marketing agreements for 200 other stores. In November 2019, it said it would target small trucking fleets with a new fueling network aligned with brands like Marathon Oil’s Speedway commercial fueling locations.
“What we do is hard and not everybody wants to do it,” Haslam said. “So staffing our stores and restaurants, 24 hours a day, 365 days a year, is challenging. We run close to 2,000 trucks between gas and diesel trucks, crew trucks, and water trucks. And finding drivers in certain areas is challenging.”
Add to the human resource task the fact that long-haul trucks now travel shorter distances: just 505 miles per trip in 2019, according to the American Trucking Associations (ATA), compared with 800 miles two decades ago.
“There’s less gas and diesel being consumed in the country every year,” Haslam said. “And so fighting to maintain market share every year is a big challenge.”
Market share gains were at the heart of a scandal surrounding a five-year fraud, in which fleets were cheated out of millions in rebates promised in exchange for fuel purchase agreements.
Former Pilot Flying J President Mark Hazelwood was the highest-ranking executive charged. He was convicted in 2018 of conspiracy to commit wire fraud, wire fraud and witness tampering and sentenced to 12½ years in prison. Pilot Flying J’s board also admitted criminal responsibility, settled a class-action suit with customers, and paid $92 million in penalties.
Haslam has denied knowledge of the scheme.
Haslam sees a saturation point for truck stops and travel plazas coming. Always a strategic exercise, deciding where to open new locations has a renewed focus.
“We’re looking at ports, areas where distribution centers are,” Haslam said. “Those are some of the things we can do to take advantage of the change in logistics … where Amazon and other distribution centers are located. We know where they are. We pay attention.”
Pilot opened a truck plaza near an Amazon distribution center two years ago in Patterson, California, known as the apricot capital of the world. Other nearby distribution centers with trucks coming and going provide a consistent flow of business.
The size of the Pilot network leaves few holes to fill. The company will open 20 new plazas this year and a similar number in 2021. After that, Haslam said, he isn’t sure.
Fueling the oil business
After merging Pilot Travel Centers with Flying J Inc. to create Pilot Flying J in July 2010, Pilot took over Flying J’s crude oil-hauling business in the Uinta Basin in northwest Utah and expanded to North Dakota and Texas.
“We recognized what was going on in the Permian [Basin] and went down there and built 20 truck stops in a three-year period,” Haslam said. “Over the last three or four years, we’ve really taken a big position in the oil fields, particularly the Permian.”
What formerly was known as PFJ Energy now accounts for about 15% of Pilot’s revenue. Haslam sees growth for the energy business, but it will be a long time before it equals the size of the truck stop business.
The role of hydraulic fracking, which Pilot supports with water hauling and storage, is underappreciated for its role in improving U.S. energy security, Haslam said.
“Think of everything that’s gone on in the Middle East the last six months. Oil, rather than being at $51 [a barrel], would be at $100,” he said. “What the oil industry has done for the country and for the world in terms of holding energy prices down is phenomenal.”
Pilot’s energy focus helps explain why Haslam speaks little about electrification.
“Despite all you read, the electrification in cars is at 1%. So it’s still a ways away,” Haslam said. “I don’t think electrification of trucks is near happening, so we wouldn’t participate in anything there.”
Haslam and his wife, Dee, have led a troubled stewardship of the Browns, including a revolving door for coaches. They recently named the sixth head coach in seven seasons, Kevin Stefanski, and hired the youngest general manager in the NFL, 32-year-old Andrew Berry, formerly the team’s vice president of player personnel.
Sports writers blame the Haslams for the Browns’s futility, including the longest absence from the postseason of any team in the league.
“We’ve made a lot of changes, obviously,” Haslam said. “I think we have a good young coach, a good young general manager, and we have a good core nucleus of young players. Now we need to add to that group of young players, and coach them well. And if we do that,then hopefully we’ll turn things around.”
The Haslam family has numerous pursuits. Dee Haslam, whose personal net worth was estimated at $1,8 billion in 2013, founded RIVR Media, a TV production company whose credits include documentaries, reality series, sitcoms, travel series, sports entertainment, and post-production services.
She also is CEO of the Haslam Sports Group, which includes majority ownership in Major League Soccer’s Columbus Crew SC.
Jimmy Haslam’s brother, Bill, was the governor of Tennessee from 2011 to 2019.
The one thing
The Pilot Co. employs 30,000 people. Providing steady employment to them is “by far the greatest thrill we get,” Haslam said.
“There’s people that we’ve worked closely with that started working with us when they were in their 20s and are now in their 40s, and they’ve been able to take care of their families,” he said. “Maybe their spouse worked when they first came to work with us. Now the spouse doesn’t have to. They’ve been able to educate their kids. That’s what’s gratifying to see.”