There's no single "magic bullet" answer to this problem so, instead, there some questions I'd like you to consider:

1. What skills does he have that got him the position in the first place? How can those be leveraged?
2. What can you do to help him navigate through the transition (I'm assuming he's not feeling comfortable, either) and become his ally
3. Would you consider having a heart-to-heart and share with him the affects his decisions have on "the moral of the staff"?
4. What feedback have you given him and what still needs to be said?

Sometimes these situations can feel like an us-against-him and leads to bad feelings and animosity. What would it take for the team to take him under their wing and help him settle into his role?

I specialize in these situations so I understand the frustration they cause but also know they can be resolved with some effort on everyone's part.

Let me know how you make out. Todd.