Just saying - it tells you a story
12 replies (most recent on top)
Middle managers are a joke at Aviation. However, our CEO is no joke. He knows the product, is more technical than most CEOs and he isn't a BSer.
Engineering is top notch, but supply chain has issues. Young kids coming out of school with degrees in history and masters in Russian studies should not be running shops. Degrees over apprenticeships is the corporate way. There's a view of manufacturing that any reject from engineering can be a manager in supply chain, or execs who don't know the difference between a mill and a lathe are can be head of manufacturing. Watch for more and more to be outsourced.
Sadly, this is not a GE specific problem.
Aviation has a virtual monopoly in the commercial, passenger, and military jet engine business and business is booming. Rolls-Royce and Pratt-Whitney are not gaining ground. GE engines are efficient and reliable. It is not because management runs it any better than any other core business. Power got stuck in the "horse latitudes" and is stagnant.
GE Aviation is no different than any GE run business when times are good . GE Corporate dictates GE discounts are to be made when GE capital pays a bill within agreed PO terms. Early payment discount we call it. Total joke. Ask the suppliers what the price is for the item if GE pays with say 45 days with no discount taken. At least 3.5-5% lower. The damn early payment discount is factored into cost money. Same goes for stringing suppliers out 120 days...cost of money is factored into invoice to GE. Pay your bills on time with no games and cost of goods goes down. Margins on orders are not high enough, GE corporate demands they should be higher... really? The problem with GE is it's leaders. They shuffle from one business doing poorly to business's that are doing well. They get their CAS ticket punched and push paper around and don't know crap about the product lines they manage. Russell Stokes is a classic example of this except Power is in a down cycle. Measure X's predict Y's ..total BS. Again run the business like you own it ...GE leadership not by metrics and what the wall street analysts wants from you. GE is f_-cking looser of company due to it corporate leadership. That is the problem with GE. They need people from outside that know how to run a company with the core assets they own. Also, if all the employees had skin the game ESOP or incentive to work the ship could be turned. Right now the GE titanic is steaming ahead with boat anchor hanging off the side named John Flannery. Yep lots of changes have been made by GE but fundamentally the biggest issue is the captain and his immediate crew.
The "other shoe" in Aviation is the same story as other GE businesses. There are too many CAS and FMP people running the place, so the books look MUCH better than they really are. The new accounting standard that GE had to put into place? It revealed how much revenue they were recognizing earlier than they should.
The systems landscape is a mess. They want to invest zero dollars into IT infrastructure, but they have segments of the business (smaller, acquired shops) running their books out of Quickbooks like some mom and pop deal. When they roll up numbers every month, those former CAS shining stars look at them, say "that can't be right - I feel it's wrong", then topline it to where they think it should be. You never topline actuals. How many articles have there been about WS analysts complaining about GE's untraceable numbers? Aviation is a PRO at this.
Inventory is a mess. Orders are behind. There are key suppliers who have GE Aviation over a barrel, so costs are going up on the new engine builds but GE can't stop it. Contracts are signed for a much lower cost, so sales is scrambling constantly for "margin escalators" at quarter end to make those numbers.
Oh, and the cash GE brings in the door? It's already sold - to itself, at GE capital. There's a weird, incestuous monetization process that goes on where GE Capital pays for GE Aviation's receivables for 99 or 98 cents on the dollar. So Q3 revenue is "sold" and isn't real. Now they are stuck in a cycle of monetization, and if they want to hop off that nightmare merry-go-round, they'll have a lot of fun explaining it to investors.
Immelt and the BOD should be investigated and jailed
The proof is gonna be after Thurs when the stock is pulled off the Dow. Thats when the credit rating will be down graded and the games will begin. The new quater starts soon, and the third quater is when they always restructure.
If Boeing acquired the company like that, any deals like with Alstom and France would be eliminated, making divisions like Power more attractive for purchase. It might cleanse the Sins of Immelt so to speak!
Heard a rumor that Boeing wants to buy Aviation. If GE stock drops far enough, they may pull a take over of GE to retain Aviation, then spin off the remaining companies to recoup the capital expenditure. They would have control over most of the engines they employ on their air frames and have better quality and delivery. Heard that in that situation the Aviation management would be eliminated and hourly would be retained with little to no effect on day to day operations with substantial pay increases and stock. They would also gain control over the repair facilities in Asia.
Aviation- Wow, so did I. Was with Power (Energy) for 11 years then went to Aviation. They can't make the numbers, the deliveries are behind by huge numbers. They are bringing in young managers that don't know the process, yet they are going to go "lean". That's just the start.
Aviation-I spent half my GE career at Aviation, other half at Power. What is so hosed up at Aviation?
Ah a nice response from more of the middle management that is driving us into the ground.
I work for Aviation....trust me, it's just as hosed as the rest of the mess. The other shoe has yet to drop.