Vice President, Strategic Planning, GE Capital Fleet Services
Tell us about GE’s global reach in the fleet arena.
GE Capital Fleet Services is a wholly-owned subsidiary of GE Capital providing comprehensive vehicle fleet financing and management services across three regions; EMEA, the Americas and Asia Pacific.
In Europe, we have a pan-European group to assist our larger cross-border customers. In addition, we have fleet units for several countries that serve intra-country customers. In the Americas, we are one of the most respected fleet management companies in the U.S. and we recently announced a strategic alliance with Element Financial Corporation to serve cross-border fleets operating in Canada and the U.S. We also have groups in Australia-New Zealand, Japan, India, and service South Korea and China with joint ventures.
What trends are you seeing in the global fleet market?
Three years ago, there were only had a handful of companies with a Global Fleet Manager. Today, that number is significantly higher. The entire GE global fleet staff work together to bring expertise and world class service for the customer. The trend toward our customers looking at fleet from a global perspective, from contracts to services is here to stay. As companies focus on a global relationship with an FMC, each country has individual and sometimes unique regulations. That presents a tremendous opportunity for GE Capital Fleet Services to put our global know-how to work for these customers. As a result, we currently partner with numerous global customers who now feel more comfortable working not only across borders – but across continents.
When a manager has been given responsibility for fleets outside of North America, what are some of the first steps to consider?
Often fleet managers have internal obstacles they have to deal with. We spend a lot of time in the early stages ensuring the fleet managers understand these potential roadblocks. Before attempting to replicate the U.S. business’ operations in Europe, you need to consider local laws and customs. For example, it might make economic sense to reduce the size of a driver’s vehicle in the U.S. for economic reasons, and the driver might understand, but in certain European countries, many fleet cars are also compensation vehicles. If a fleet manager changes these vehicles, there might be a violation of HR policies.
The concept of global fleet management seems to be on the rise.
There was a conference in Europe last year where 80 percent of the attendees said that within the next eighteen to twenty four months they would have a global fleet manager as a title and a responsibility; that is a major shift in the dynamics of a fleet global manager. During the economic downturn many companies saw the dollars spent on their fleet program and decided to place rigor in this process as they do in many other categories. Over the last two years these global fleet managers analyzed the data, presented their findings internally and are now embarking on rationalizing all aspects of their respective fleet policies. Consolidation is the answer in certain aspects of their fleet financing and diversification is the answer in other aspects. GE Capital Fleet Services has worked with many of these companies as they develop all aspects of their fleet policies.
If I were a global fleet manager I would certainly want to have a good partner. What do the partners bring to the table?
The most important aspect a Fleet Management Company can bring is consultancy. One of GE’s mottos is “We are not bankers, we are builders.” GE’s Strategic Consultancy Service –known as Key Solutions in Europe – is a big differentiator for GE Capital Fleet Services. We believe our service is world-class and is just one more way that we are actively working to provide a truly global solution. To achieve this, we host global conference calls with customers around all parts of the world on one single day. It’s received great feedback from customers
How do you help a typical fleet reduce their spend?
The RFP process establishes a basis for comparing the basic components of financing your fleet. But the interest component of the Total Cost of Ownership analysis relates to 5–6 percent of the overall cost of the vehicle. Choosing a fleet management company that offers the lowest rate but does not offer a world class consultancy service is short sighted compared to the millions of dollars that can be saved.
GE Capital Fleet Services has a team of consultants that work with the customers to save money. This is one of the key differentiators between GE and our competitors. Advising a customer to switch vehicles to a less expensive model is not a value added service, but reviewing each cost that is associated with the Total Cost of Ownership from the negotiations with the OEM’s through to the re-marketing of the asset at the end of the lease, GE’s international consultancy teams can leveraged the lessons learned in one pole to each of the poles to offer a global view of potential savings.
What about management services, maintenance and collision management?
Over the last few years GE has focused on delivering new products and services on a regular basis. We have Customer Advisory Boards in the US and Europe and we meet regularly with them to discuss issues and desires. We are the only FMC that also has a Technology Customer Advisory Board that focuses on the quickly changing technological advances and requirements of the driver, the fleet managers and the Environmental, Health and Safety groups within our customers’ organizations. Safety is a major concern of fleet managers and GE is working with customers and vendors to provide the leading consultancy for all of these requirements.
Let’s talk about an ideal fleet.
I learned a long time ago from a GE CEO that once you fix your top ten developmental needs you work on your top ten developmental needs. There is no “ideal” fleet. Every fleet GE has transitioned is reviewed and recommendations are made. On a regular basis we continue to review each customer’s fleet, learning from other fleet’s best practices and continuing to improve technology, products and services. It is a partnership that seeks to improve the customers’ fleet from all aspects.
What are some of the mistakes that you have seen that could be corrected?
I recently spoke at a conference with 30 global fleet managers and told them that the single biggest pitfall is failure to understand their company’s internal organization. Building stakeholder consensus within the organization is the single biggest action item that any newly appointed global fleet manager can achieve. Having the title without the authority or sending an email to a far distant country without appropriate stakeholder buy-in will lead to frustration and failure. Look for low hanging fruit in the first 100 days, look to understand the various cultures and regulations in each country, and reach out to organizations for the names of other global fleet managers.
Can you give us a success story?
GE Capital Fleet Services and one of its global customers have expanded the relationship from advising on selectors, safety, products, replacement cycles, CO2 emissions and are now engaged in their long term planning process. GE is known for its six-sigma processes and we are the only FMC that can offer Access GE, a service that brings this six-sigma rigor to aspects both within and outside the customers’ fleet focus. Our success in expanding the scope of service from the planning for the next order cycle to planning for 2018 mobility is a key differentiator that GE brings to our global customers.
Let’s talk about the impact of CO2 emissions rules on the global fleet.
In the U.S. it relates to standards imposed by Washington onto the shoulders of the OEMs. But in Europe CO2 emissions are on the minds and in the wallets of both companies and drivers. There are new standards for vehicles over the next few years and GE is working with customers to develop a roadmap to achieve the CO2 targets of both the regulators and the CEO. In addition GE Fleet is at the forefront of alternative vehicles. We recently opened our Vehicle Innovation Center at our corporate headquarters outside Minneapolis where customers can work with numerous alternative fueled vehicles in a single location. In addition, our parent company GE offers “CNG in a Box” technology to advance the use of CNG vehicles and GE currently owns the largest fleet of sales representative EV vehicles.
Why is Europe so far ahead of us in emissions control?
In recent years governments in Europe have seen a path to raising revenue through taxing both the company and the driver for using high CO2 emitting vehicles and the European OEMs have responded by developing engines with both low emissions and high horsepower. If you remember 15 years ago in the U.S., there were few diesel powered vehicles for two reasons; there were very few fueling stations that sold diesel fuel and the acceleration of diesel powered vehicles was significantly less than gasoline powered. Today, both of these issues are solved. Almost all service stations sell both gasoline and diesel and the acceleration of diesel powered vehicles is on par with gasoline powered. The U.S. has narrowed the gap with Europe on diesel and now the U.S. is looking to offer more alternatives to the consumer with other alternative powered vehicles.
Jeff Schlesinger joined GE in 1996. During his career at GE he financed aircraft, real estate, water desalination plants, International Joint Ventures, managed Structured Products groups and was the Capital Markets Leader for most of the GE industrial businesses. Jeff joined GE Capital Fleet Services in 2008 to position the business during the financial crisis and now oversees its Global Initiative and Business Development efforts. In this capacity he recommends strategies to many GE global customers. Jeff received his BA in Economics from Georgetown University and an MBA in International Finance from the University of Chicago Graduate School of Business.