GE won't finance gun purchases
The company has stopped offering financing for gun purchases to small gun shops. The move comes after the Newtown shooting in December.
General Electric (GE) is cutting off providing financing for gun purchases at gun shops.
GE Capital Retail Bank, which provides financing to the customers of many small businesses, has started sending letters to gun retailers -- saying it has made "the difficult decision" to stop providing financing to their businesses.
The move came in part because GE is based in Fairfield, Conn., The Wall Street Journal said Wednesday afternoon. A number of employees live in and around nearby Newtown, where 20 first-graders and six adults at the Sandy Hook Elementary School were killed during a rampage by Adam Lanza in December. A number of those workers had children in the Sandy Hook school.
Lanza killed himself before police could arrest him.
A GE spokesman, Russell Wilkerson, told The Journal that "industry changes, new legislation and tragic events" led GE Capital to reexamine its policies on financing firearms.
GE Chief Executive Jeff Immelt held a town hall meeting with affected employees after the shooting, and GE's board of directors has been briefed on efforts to help staff, The Journal said. Lanza's father is a GE employee.
The move shows how companies, which do pay attention to to investor-and-employee concerns, have reacted to public horror over the attacks, even as complicated political considerations doomed new gun-control legislation in the Congress.
GE Capital Retail Bank is part of GE Capital, the conglomerate's huge financial business. GE Capital generates about a third of GE's revenue and had $555 billion in assets at the end of the first quarter.
But the odds are the move had little if anything to do with the gain GE shares enjoyed on Wednesday. The shares were up 47 cents to $21.97. The shares are down 5% this month but up 4.7% for the year.
The company's exit will have little overall impact in a U.S. gun market where sales in 2012 totaled $11.7 billion, according to IBIS World. That's roughly the size of GE Capital's first-quarter revenue.
While a typical handgun can cost more than $300, financing remains a marginal business.
GE's ban applies only to retailers whose sole business is selling firearms, an "insignificant and immaterial" part of GE Capital's business, Wilkerson told The Journal.
GE Capital is still doing business with merchants with more diverse lines of business, including Wal-Mart Stores (WMT), the nation's largest seller of guns and ammunition, and Dick's Sporting Goods (DKS), he added.
But the Journal noted there will be actual consequences for the companies that used the service. Gun sellers said financing leads customers to spend more on firearms and accessories.
GE has grown to be a bigger lender than all but four of the country's commercial banks, in large part by catering to specialized niches and hundreds of thousands of smaller customers, like fast-food franchises and retailers, that weren't a priority for bigger rivals.
The company began offering financing for retail purchases to gun shops in 2006, The Journal said. Two years later, however, the company stopped taking on new gun-shop customers but continued to finance existing customers.
But smaller lenders have stepped into the gap and are expanding their efforts.
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Weak. How about you stop offering financing to all the mom-and-pop stores that sell cigarettes? Or the Auto businesses? Cars kill quite a few more people than guns on a daily basis.
Maybe you should close your own doors? You are one of the largest contributors to the decline of the middle class. Your greed hurts almost ALL Americans on a daily basis, forcing people out of their homes and starving them to death. You're disgusting.
FUKGE they can stick there credit cards up there azz. i have a few in my wallet i will cancel them,they can go get fukted the un american son of a beaches BOY COTT THEM FUKUM
Nah, I will vote my GE shares to kick the ENTIRE Board of Directors OUT. I will however, cease buying any GE products or using any GE financial products.
It is as though GE has joined the democrat party, and thus opposes the Constitution. We have enough traitors in Obama and his ilk...
Apparently they don't teach the concept of "goodwill" and its value anymore at Harvard Business School. A GE spokesperson mentioned in the story said gun financing was an "insignificant and immaterial" part of their business. And yet it has generated a significant amount of ill will towards GE. Makes you wonder who in the Obama administration they are trying to impress, or what sizeable government contracts they are after.
As a gun owner and Vietnam vet, I will think twice about doing business with a company that casts moral judgment on a large segment of the public; especially as others have mentioned, its own past is full of unethical, immoral and possibly illegal activities.
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