When Jeff Immelt stepped down as chairman of General Electric a little early, he did so in the knowledge that his successor would be doing a lot of things he wouldn’t like. And he could not have been more right! Indeed, everything John Flannery has done since taking the helm has amounted to an implicit attack on Jeff Immelt personally.
Immelt’s annual executive golfing and fishing retreat in Florida, capped by the Imperial CEO himself handing out some coveted pats on the head? Gone: Those few GE execs still worthy of the chief’s approval can swing by a Boston conference room for a quick handshake with the boss. And they won’t be getting their in company cars or company planes, either: Those are gone, too, along with three of the company’s five research center and probably thousands upon thousands of corporate-level jobs.
Still, nothing has attracted attention and opprobrium quite like the story of Immelt’s own jet. Or, jets.
For much of Jeff Immelt’s 16-year run atop one of the world’s largest conglomerates, an empty business jet followed his GE-owned plane on some trips to destinations around the world, according to people familiar with the matter…. The second plane was a spare in case Mr. Immelt’s jet had mechanical problems. A GE spokeswoman said that “two planes were used on limited occasions for business-critical or security purposes.”
Now, that is some next-level CEO shenanigans.
“Not even heads of state get that kind of treatment,’’ Mr. Davis said. “You hear about this and you have to wonder what else they were spending money on. You really have to question the financial oversight and controls and internal audit. You have to question the entire organization….”
Robert Strang, a corporate security expert and the chief executive of the Investigative Management Group, told me he has been conducting security audits for chief executives for 29 years and could think of no similar example.
“If a destination is so dangerous that it requires a backup plane, then a C.E.O. shouldn’t be going in the first place,” he said. And it’s not as if Mr. Immelt was traveling to war-torn Syria or Afghanistan.
Now, Jeff Immelt knows how bad this looks. And he wants everyone to know that he had no idea that there was a second jet trailing him just in case at a cost to shareholders of $6,500 an hour.
The corporate air team was overseen by our senior human resource manager. Given my responsibilities as CEO of a 300,000-employee global company, I just did not have time to personally direct the day-to-day operations of the corporate air team. I had every right to expect that it was professionally run. Other than to say “hello,” I never spoke to the leader of Corporate Air in 16 years.
Which means that he presumably communicated to said person through an intermediary when he learned of the practice and ordered it stopped in 2014. Except that it wasn’t!
The two-plane trips continued until at least this past spring, according to people familiar with the matter and flight records…. On March 11, for example, two GE-owned Bombardier Global Express jets took off from Boston within 19 minutes of each other and flew to Anchorage, Alaska, according to Federal Aviation Administration flight records reviewed by the Journal.
One plane stayed in Anchorage for more than five days, while the other flew on to South Korea and China, according to FAA records. Mr. Immelt tweeted a photo of his visit to a Chinese factory during the trip. His plane returned to Anchorage on March 17, and within 90 minutes of his arrival, both planes left Alaska to return to the East Coast, the records show.
Just a year earlier, they weren’t quite as conservative.
In September 2016, the two jets followed each other around the globe on a nine-day voyage that included stops in Anchorage, Tokyo, Kuala Lumpur and Helsinki before returning to the East Coast, according to FAA records and flight-tracking services. Mr. Immelt visited several South Asian nations during the trip, according to local press reports, and was photographed with Malaysia’s prime minister.
The extra plane added about $250,000 to the cost of the round-the-world trip….
Again, Jeff Immelt knows how bad this looks! Especially since it turns out the board didn’t find out about it until last month, in spite of a years-old whistleblower complaint! But, you know, he tried to keep things as cheap as possible! He really did! At least when he wasn’t tripling the number of company cars on the road.
When I became CEO in 2001, GE owned several aircraft…. Two of these jet were Boeing Business Jets…. These planes were very expensive to operate and maintain. Because of this, I directed that the planes be sold, which they were.
They were replaced by smaller, more efficient aircraft that were much less expensive for GE to operate and maintain. At the same time, I eliminated company-paid apartments in New York City, golf memberships and other expenses that were not needed to grow the company. These actions saved the company millions each year.
So, you know, it’s probably a wash.
Metaphor for G.E.’s Ills: A Corporate Jet With No Passengers [NYT]
Jeff Immelt on G.E. Corporate Jets [NYT]
GE Board Was Kept in the Dark About CEO’s Extra Plane [WSJ]
GE has eliminated corporate cars for senior execs as part of cost-cutting measures [CNBC]