October 9, 2017
GE making waves by removing executive perks
Usually, when a brand’s top executives are in the news related to executive perks, the average reader will not be inclined to be happy about the direction of that story. This is not the case with General Electric, however. At least this time.
According to a recent report by CNN, General Electric is “eliminating company cars for senior executives… as part of the company’s overall cost reduction plan…”
General Electric to Cut Cost
Many American consumers already knew GE was looking for ways to cut corners, so many expected that belt tightening to include “staff reduction.” Instead, executives are going to see fewer perks in order for the company to get some red out of its ledger.
But the company wasn’t done yet. GE also said they had plans to ground its fleet of corporate jets as yet another cost-saving move. Likely, there will be more to come.
These decisions are aspects of GE’s plan to trim about $2 billion in overall costs by the end of next year. The cost-cutting is certainly a necessary move. The company hasn’t been doing well as of late, and investors are not happy. Executives needed to make some quick decisions, both for investors and for their public image.
The multiple news stories of top executives losing multiple perks are likely to win fans at kitchen tables across the country, but it may not be enough to assuage frustrated shareholders. GE has had a pretty rough 2017 so far. Stock is down 22 percent, and CEO Jeff Immelt left the company last August after a 16-year run in the top spot.
New CEO, New Plan
The job of fixing the 125-year-old company, which is one of the most recognized in US history, now falls to CEO John Flannery.
Almost immediately after taking the job, investors told Flannery he needed to do something to cut costs. That was non-negotiable. Further, employees would be expected to be held accountable for results, and that accountability would be top-down. At the time, Flannery made news by promising that he “heard them loud and clear.”
So far, he seems to have made good on his word, working hard to cut costs without damaging the company’s image among American consumers. While, at present, there are no hard figures as to how much cutting the executive perks will actually save GE, so there’s strong speculation that there will be more belt-tightening coming. So, are these decisions meant to soften GE’s image ahead of inevitable layoffs?
Ronn Torossian is the Founder and CEO of the New York based public relations firm 5WPR: one of the 20 largest PR Firms in the United States.