In the spotlight: GE Capital

Historically, GE Capital’s policy on speculation was to offer a friendly but firm ‘no comment’, echoing the approach of its American-based multinational parent.

Silence was also the preferred defence mechanism to quash any attempt to probe deeper into the business; for example, GE Capital is the only leasing company not to provide a split of its car and van figures for the annual FN50 report.

More recently, however, a new openness has descended. Invited to visit GE Capital Fleet Services managing director Gary Killeen at the company’s new £4 million head office in Sale, the new mind-set is immediately apparent: questions are answered in full giving for the first time an enticing glimpse into the inner workings of one of the world’s largest leasing companies.

A sample quote: “We want organic and potentially inorganic growth. But acquisitions would have to be a strategic fit. There is still a lot of activity in the market; if you look at the ownership models, some are more short-term than others.”

And of the car and van figures? GE Capital’s risk fleet of 47,000 vehicles divides roughly into 39,000 cars and 8,000 light commercials. But more on that later.

Among leasing parent companies, GE is unique: its business interests encompass aviation, electronics, energy management and healthcare, as well as vehicle leasing – all on a global basis. Such weight gives it significant financial muscle when it comes to investing in technology and people, two of GE Capital’s three-pillar strategy (listening is the other).

Of technology, Killeen says: “It is central to how we serve the fleet market in the next 20 years. We have invested £50m in the past seven years on new initiatives at an EMEA level (Europe, Middle East, Africa).”

This investment has seen an overhaul of GE Capital’s decade-old iManage system to incorporate a portal for fleets and one for drivers covering every service requirement from quotation to lifecycle service delivery.

Two examples illustrate why the investment in technology is crucial: 84% of orders are now self-served by drivers via iManage, while 95% of customer reporting is automated (it results in around 2,100 bespoke reports a month).

The system underlines the change in the contract hire and leasing sector. “Seven or eight years ago we were asset managers; now it’s about managing people and that requires technology and data management,” Killeen says. “Technology gives customers options.”

GE Capital’s ability to handle personal and sensitive information about drivers is essential, particularly with around three-quarters of its 250 customers fully outsourcing delivery of their fleet services. Again, it can draw on the rigorous processes employed by its parent company.

Those 250 customers operate around 47,000 vehicles. Both figures have remained fairly constant since GE Capital exited the SME and broker-led fleet sector – typically companies with fewer than 10 vehicles – in 2008. At that point it had 4,000 customers.
“We couldn’t see where we could add value ,” Killeen says. “Concentrating our customer base helped us to focus on what’s important to those clients and to deliver that service.”

He adds that customer satisfaction scores are at an all-time high, although GE Capital has always had a strong relationship with larger fleets thanks to its customer advisory board which was created 14 years ago.

The board forms part of the ‘listening’ pillar, together with bi-annual customer scorecards and driver surveys. All information is assessed and any key themes are identified which drive future investment in the business.

“The customer advisory board has been a fundamental success – it’s a central point to validate and develop our strategy,” Killeen says.

The board consists of 15 fleets, regularly rotated, who provide feedback on market trends, products and services they want to see, and shortcomings in GE Capital’s own offering. Outcomes include investment in new services, the development of iManage, creation of 200 critical fields for real-time data management and implementation of “the broadest set of KPIs in the industry”, according to Killeen.

“Service should be a given so we can focus on future strategy with our customers. We have around 80 KPIs, from pre-ordering to back-end disposal, that were all defined with our customers,” he says.

Two new advisory boards have since been established: one for dealers and one dedictated to light commercial vehicle fleets. The latter coincided with the creation of a dedicated light commercial vehicle team as part of GE Capital’s strategic growth plans. In the four years since, GE Capital’s van fleet has doubled from 4,000 to 8,000.

“Sixty per cent of our customers and our prospect database has an LCV requirement so it’s a big part of our offering,” Killeen says. Growth in vans has come from both existing and new business.

Killeen adds: “A lot of our discussions with fleets are about asset funding, moving from purchase to lease – around 15-20% of our prospects are looking to release capital in that way and it’s across the board, both cars and vans.”

The typical GE Capital customer is looking to remove non-core activities. They want funded solutions but also an opportunity to remove some of their internal overhead and the cost of investing in technology by using software provided by an external supplier to manage admin.

Key contacts range from senior HR to sourcing with a trend towards senior category managers, although fleet managers are still commonplace, particularly on van fleets where compliance and day-to-day management are vital.

“Their role has changed from admin and operations because we have automated those,” says Killeen. “It frees them up to look at other areas, such as safety.

“The fleet manager is a low cost way to maintain a strategic owner for the fleet spend,” he adds. “If they go beyond that then they are probably missing opportunities to drive new initiatives. But we need someone to help implement change for the benefit of the business.”

Anyone not convinced about GE Capital’s belief in the fleet manager role need look no further than its own Fleet News Award-winning car fleet. Despite numbering just 220 vehicles, it employs a dedicated fleet manager, Damion Bennett.

His role recently expanded to handle GE’s entire UK fleet of 2,000 vehicles which gives the leasing company an ideal test-bed for new initiatives.

GE Capital’s third pillar is its people. Whenever it employs new staff, either from competitors or adjacent markets, it asks for their impressions of the company. “They talk about our fantastic culture,” Killeen says. “We have people with expertise and who have a passion for the customer.”

The company invests a lot of money developing its people and creating career opportunities, both in the UK and abroad.
It results in a highly-motivated workforce, according to Killeen, which benefits fleets. “If people enjoy their job it comes across in their service delivery,” he says.

It also comes across in the stability in client-facing roles so desired by fleet managers. One GE customer has had just four account managers in the past 20 years, for example.

Killeen believes that GE Capital’s three central pillars provide clear differentiation with its competitors.

Now, after six years of consolidation and stability, he is looking to put those differences to use by growing the business – organically and possibly through acquisition as well.

“Fleet is core to our business, hence the investment we have made in a challenging market over the past four or five years,” he says. “We have aggressive internal growth targets.”

Key Solutions identifies savings worth £19m

Key Solutions is GE Capital’s consultancy team which works with fleets to improve their efficiency and help them to reduce cost. In the past 18 months alone, the team has identified savings worth £19 million for UK fleets.

The team has recently been working on an integrated solutions programme which will combine data from a variety of sources. One outcome will be the ability to focus on what Gary Killeen calls “avoidable cost”, such as fuel usage, accidents, damage and non-scheduled maintenance.

“Our investment in technology gives us the ability to amalgamate data feeds – ours and from third parties – to understand behavioural aspects that are driving these costs,” he says.

“We don’t want our customers to be paying these costs and if we can help to remove or reduce them, it will help us to keep them as customers.

“It will enable us to take on more aspects of fleet management – not just asset management, but everything from short-term rental, accident management, driver training and mileage capture.”

GE Capital has 50 Key Solutions staff globally – five in the UK – and they all interact as a community, sharing best practice.