After restructuring, GE Fleet is focusing on systems development
for its pan-European corporate clients, Jo Tacon finds
GE Capital Solutions, Fleet Services – to give the fleet
management and leasing arm of multinational behemoth General
Electric its full name – is the largest fleet lessor in the world,
with over 1.4m units under management. In the UK, GE Fleet – to use
the shorter, more user-friendly version of its name – sits
comfortably within the top 10 lessors, with a fleet of
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Gary Killeen, general manager of structured financial solutions at
GE Fleet UK, says that being part of such a large parent brings its
own opportunities. “There’s a lot of scope for cross-selling,” he
says, and clients who come to GE Capital Solutions for other
services than fleet often end up moving their fleets over to us.”
This is not a one-way street; staff at GE Fleet can talk to clients
about the wider activities of the Capital Solutions unit, which
includes among others the Equipment Finance business. There is also
an Enterprise Team tasked with identifying and capitalising on
cross-selling opportunities at a European level.
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“It’s all about the strength of our systems,” Killeen opines. “Once
clients see what we can offer on one side of the business, they are
often keen to work with us in other areas.”
Change before you have to
At GE Fleet’s annual Future of Fleet
event, delegates are given a branded document folder. One such
folder acquired at a previous Future of Fleet conference bore the
legend “GE Commercial Finance Fleet Services” – a physical reminder
that the fleet division moved over into the Capital Solutions unit
only fairly recently, in 2007. “The move reflected how we see
fleet, from a GE perspective, as sitting within the wider issue of
how companies manage their funds,” Killeen explains.
The wider Capital Solutions unit has recently undergone a
restructuring, which has involved job losses elsewhere in Europe
and a move away from providing finance to small- and medium-sized
enterprise (SME) customers – and GE Fleet is not an exception to
this shift in focus. “We have decided that, as a business, we will
increasingly look to our large customers with whom we have a
relationship on a pan-European or a global scale,” Killeen
explains. “This will mean moving out of the very small fleet
customer market.”
In GE’s view, Killeen says, the investment the company has made in
its technology platform (with an annual IT budget for the European
Capital Solutions business of £50m) and its consultancy services
pays off best with a customer base that is composed of
multinationals. “We have built an infrastructure to service a large
client base,” he says.
Systems investment
In January, GE Fleet launched the iManage web portal for customers,
which works as an information source – allowing
individually-tailored advice on fleet issues to be communicated to
customers – and also as a management information dashboard, giving
access to data on a pan-European basis.
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By GlobalData “With iManage, we can flag up anomalies for customers based
on pre-arranged limits and budgets,” Killeen says. So, for example,
if a client’s drivers are having unusual numbers of accidents, this
will be automatically brought to the notice of the person
responsible for fleet. “It’s a step change up from anything else
available in the market, Killeen adds.
Outsourcing consolidation
GE Fleet is, Killeen insists, very much focused on offering its
clients a “total outsourcing and funding solution”. The credit
crunch’s effect on the business unit has been mixed: while some
clients have shed staff as a result of merger activity or as a
downsizing measure, and shrunk their fleets as a consequence, the
overall squeeze on liquidity has brought leasing more to the fore
as a financial instrument of proven worth to cash-strapped
firms.
On the outsourcing side, GE Fleet offers – aside from environmental
management, a duty of care solution, alternative forms of vehicle
financing such as ECO schemes, driver contact and so on – an
outsourcing capability for clients with their own internal leasing
company. “After the 1995 change to VAT laws, some cash-rich
companies set up an internal leasing company using their own funds,
in order to benefit from certain tax positions. We offer
fully-compliant management of these schemes, and have been
successful in running them on clients’ behalf,” Killeen says. As
the liquidity crunch bites, however, internal leasing companies of
this type are becoming less common. “It’s not a dramatic impact,
but customers which historically self-funded are now looking to get
a funded fleet,” he adds.
The decline of the fleet management department has also had a major
impact on GE Fleet and other lessors, he believes. “Companies which
are having to fight to survive are cutting back on non-core
activities, and fleet management – as a very complex and demanding
area – is an area ripe for outsourcing,” he says. “As such, over
the last decade we have seen a requirement to consolidate service
delivery – offering services such as daily rental or accident
management which, historically, were provided by standalone
companies. Now we can take a holistic view, and help clients reduce
whole life costs.”
The “holistic” approach is paying off for GE Fleet – over the last
year it has won several major deals, including (ASK SANJAY).
Moreover, its customer retention rate is “100 per cent over the
last three years – touch wood,” Killeen says. “In this highly
competitive marketplace, I think that/’s a testament to the service
we provide.”
