- The Wall Street Journal reported Wednesday that former General Electric CEO Jeff Immelt had an empty business jet follow his corporate plane.
- That story was an exaggeration, sources familiar with the matter told CNBC.
- It was not a regular practice to keep multiple planes on standby, the people said.
The Wall Street Journal reported Wednesday that Immelt had an empty business jet follow his corporate plane on several trips around the world. That version exaggerates Immelt's travel practices, sources familiar with the matter told CNBC.
These people said it was not a regular practice to fly, or even keep on standby, multiple planes at the same time. The sources said a second plane was kept on standby on the ground in certain locations while Immelt was visiting for security purposes or in case his GE-owned plane had mechanical issues. For example, this was done on some parts of a multistop trip in Africa and another trip that included Mexico.
There was a time when GE used a chase plane — a second, empty plane that would follow along — but that practice was ended in 2014, sources said. At that time, Immelt changed the policy to use locally sourced planes. Those people familiar with the matter emphasized that this was done especially for added security after 9/11. Business critical purposes, sources said, included time-sensitive meetings with leaders of countries.
The Journal report also alleged that the alternative jet would park at a distance from the other one to avoid attention, saying crew members were discouraged from discussing Immelt's travel arrangements.
In a statement to the Journal, GE said: "two planes were used on limited occasions for business-critical or security purposes." GE declined to comment.
Corporate governance hawk Nell Minow told CNBC it is difficult to know how many global companies use similar practices.
Many companies have shifted to using fractured ownership of private jets, which makes oversight more difficult.
"Whatever benefit General Electric saved or extra layer of security they achieved, it was not worth the hit to their reputation," Minow said.
The revelations came amid a broader WSJ report about Flannery's cost-cutting and efficiency measures to reshape the conglomerate.
GE is expected to report earnings early Friday morning, with their conference call following at 8:30 a.m. ET.
In an exclusive interview following the earnings report, Flannery will be on CNBC at 10 a.m. ET to speak with "Squawk on the Street." This will be Flannery's first interview since becoming both chairman and CEO.