Supe, the guy sounds like a cancer. No amount of job skills can make up for bringing down the morale of the rest of the team. I had the same situation at my last company.
This guy came in - MBA, 20 years management experience, plenty of energy - but he was a complete a-hole to the rest of the design team. The pipe designers, I & E designers, and civil designers that we had assembled all had 20+ years of experience. No degrees, but they were the best! This guy looked at them as not much more than janatorial or clerical even though they were professionals who probably made as much as he did.
But since he had the "degree" and he was leading the projects, he thought he crapped ice cream. I brought him into my office one day - after multiple complaints from multiple designers - and told him, I'd rather lose you than lose my designers (we share personnel on projects).
He became a pretty decent guy after that and everybody grew to not necessarily like him, but at least tolerate him. Some people just have a superior attitude.
I treat everyone as an equal and everyone loves me, even though I know I'm superior in just about every way.
Bottom line, if the guy is bringing down the productivity of the rest of your people, you have to either tune him up, or cut him loose.