GE Flight Department Closes
Though not yet official at the time of this writing, word has gotten around in the industry that GE has closed its flight department (Corporate Air Transport) this month. Apparently, it is still keeping its helicopter operation, and there is speculation that it will be using a fractional/leaseback type arrangement for future corporate travel. Several of its flight department personnel have reported that they have already been dismissed.
What is most striking about this latest corporate flight department shutdown is that GE is a key player in making the very products that it had used in its flight department! GE is, of course, heavy into aviation – manufacturing engines such as the CF700 and CFE738 used on Falcon Jets, as well as the GE HF-120 developed in collaboration with Honda on the Honda Jet, and many other commercial and helicopter turboshaft products. In addition, GE manufactures support products such as borescopes and other NDT equipment used for keeping aircraft in the air.
According to a report from Bloomberg https://www.bloomberg.com/news/articles/2017-09-20/ge-cuts-use-of-company-planes-under-2-billion-cost-savings-plan GE’s new CEO, John Flannery is selling its jets in a push to cut $2 billion in expenses after a slide in stock values this year. Flannery has gone so far as to not only cut their jet fleet, but changing company policy to allow it’s CEO to fly charter or on commercial flights.
In general, I am not averse to being frugal. I myself have been known to be a “cheapskate” in my personal life and in business as I try to balance the budget. But that said, I certainly believe in supporting and investing in the things you believe in and have grown your business and life around.
GE seems to have fallen victim to the “Tail wagging the dog” syndrome, where the accountants and financial people are now running the show. To me, this is ALWAYS a sign that a company has become rudderless!
GE, and other companies don’t grow by reducing costs. Cost cutting, in order to make your “numbers” is (almost always) a downward slope. Downward because it removes people/resources in order to hit a number, then those resources/people are no longer at the company to contribute, so the revenues fall in subsequent years, and the company shrinks, only to be met by further cost cutting to hit the previous year’s profit numbers, and so on and so on.
Businesses don’t grow through cost cutting – they grow through taking chances, investing, innovating, etc. Bringing on a CEO to “trim” the company may work for the investors – but is poison for long term success.
Perhaps more important though is what GE – not believing in its own products – says to the aviation community!
How can GE expect corporate America to invest in/utilize its products and services – if it isn’t investing in these products and services itself?
Let’s face it – despite some people feeling that business aviation is just a luxury for rich business executives, we all know that corporate aviation is a LOT more than that. Corporate aviation keeps people like you and I employed, keeps our families fed, keeps the economy healthy, and is a major contributor to the growth of technological innovation. Thousands upon thousands people work to produce the raw materials needed to manufacture these jets, build these jets and work to maintain them. Not only are business jets TOOLS that can help large and small companies keep and develop new business – these are drivers of the economy that keep you and I employed.
Companies like GE need to take a leadership position here and show the aviation community and the public that they are proud of supporting the aviation industry. They need to grow their corporate flight department – not close it.
Thanks for reading
Greg Napert, proud to be an A&P