General Electric’s new CEO John Flannery has started making drastic cuts that bring an immediate end to some of the rosier corporate perks–from company cars and lavish retreats to its fleet of business jets.
John Flannery–who has spent two and half months now atop the industrial giant–made headlines when he grounded the entire fleet of six business jets in cost-cutting measures to whip GE back into shape. Now he’s also getting rid of an empty business plane that Flannery’s predecessor, Jeff Immelt, had tail a GE-owned jet on select business trips around the world, according to The Wall Street Journal.
According to the WSJ, the two jets would park a fair distance away from one another so as not to attract attention, and flight crews never explicitly discussed the empty jet, which was used as a spare in case Immelt’s plane encountered technical or mechanical issues. The WSJ reports a GE spokesperson as saying that “two planes were used on limited occasions for business-critical or security purposes.”
But Flannery isn’t stopping at jets. The WSJ’s sources also said he intends to kill a long-standing company car program that benefits some 700 top managers, and an annual three-day retreat in Boca Raton for top management.
The new CEO is expected to unveil further changes including “thousands of corporate-level job cuts and scaling back of GE’s global structure”, the paper cited people familiar with the matter as saying. Flannery also intends to close GE’s Shanghai, Munich and Rio de Janeiro research centers, leaving the international conglomerate with just two global research sites in Niskayuna, N.Y., and Bangalore, India.
The company is under pressure from activist investor Nelson Peltz to improve lackluster returns, and earlier this month agreed to appoint a representative of Peltz’s Trian Management to its board. It’s expected to announce heavy restructuring charges when it unveils its latest quarterly report on Friday. While it has promised to keep its dividend payout unchanged, some analysts have speculated that it, too, could be cut.