Yeah, but he really knows his stuff...
Every organization worth its salt has at least one guy like this. Someone who knows every technical detail, or has vast expertise in the parliamentary procedure. Perhaps he's the coot who knows every verse of the Bible or is the only one with a Master's license. Maybe he's the guy (the only guy) who can fix that big machine.
And he's a jerk.
He's the first one to point out a minor technical glitch and the last guy to want to get on board with a new program. He hazes first-timers and avoids the people who are actually productive. Or he's the one who can take any metaphor and make it literal, instantly, poking holes in it as he goes.
And of course, he's the one everyone has to tiptoe around, because they know his technical status can sink their initiative.
I think you should fire this person immediately. Okay, maybe give him exactly one warning.
You'll find someone else who really knows this stuff. No doubt about it. And firing one intransigent bully is a lot less painful than shutting down an entire division next year because he paralyzed your decision-making.
Deep technical competency is overrated compared with the ability to make excellent decisions and to create a culture where forward motion is valued and personal initiative is rewarded.
The good news is that the bully knows this, and the only reason he gets away with being a bully is that he thinks he's got you bluffed. Call his bluff and odds are you'll have a much more cooperative team, top to bottom.