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.

By Charley Blaine Apr 24, 2013 4:53PM
© Steven Senne/APIn terms of business, revenue and earnings per share, this is hardly worth even a mention. The symbolism,  however, is a different matter.

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.


GE isn't alone in not extending financing. Wells Fargo (WFC) hasn't financed gun purchases for a decade. Citigroup (C) doesn't either.


But smaller lenders have stepped into the gap and are expanding their efforts.


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25Comments
Apr 24, 2013 5:32PM
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GE took the taxpayers (a lot were gun owners) money for the bailout and it was for the damage that GE Capital caused. Bite the hands that saved you. GE was the same company that was suspected of selling  technology to China that could end up being used in Chinese military jets but that was OK as there was money to be made. GE was already on my blacklist so I can't boycott them.  

Apr 24, 2013 6:06PM
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I just shredded my Discover Card that belongs to GE Capital !!  I will not close my account because it would hurt my credit score , but I will NEVER use a GE Capital card again !!    GE SUCKS !!
Apr 24, 2013 6:31PM
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As a stockholder I am disappointed in GE.  GE should be trying to make a profit not social commentary outside their product lines.  Immelt, get involved.
Apr 24, 2013 5:17PM
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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.

Apr 24, 2013 6:25PM
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Immelt needs to be fired.  Time for him to go.
Apr 24, 2013 7:01PM
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My Brother just sold all his GE stock , 4,000 shares !!!$$$$$$$$$$  Bye, Bye   GE !!!!!   He plans on buying a Colt-AR-15 from Connecticut and a Ruger Mini-14  !!!    I plan on doing the same !!!
Apr 24, 2013 7:09PM
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      GE sucks wouldn't do business with them if they were the only financial institution left on earth, talk about being two-faced money grubbing turds....
Apr 24, 2013 7:59PM
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It looks like 100% of the comments do not approve of GE's choice.  I thought obama said that 90% of americans approve of gun control ? uumm. I'm no mathlete but it looks like the views are 190% apart. 
Apr 24, 2013 6:32PM
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They haven't grown big because of their business their getting Bernanke bucks fail GE.
Apr 25, 2013 8:00AM
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No more GE products for me or my business.
Apr 24, 2013 7:15PM
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If you only have Credit cards from GE or GE Capital....That kind of tells me something.
Apr 25, 2013 1:47AM
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I sent them a email letting them know just what I think about it, you can too. 
Apr 24, 2013 10:35PM
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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... 

Apr 24, 2013 7:18PM
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If Jack Welch had a gun handy, I'll bet the first human he would level the sights on would be Jeff "the hump" Immelt.
Apr 25, 2013 11:59AM
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I believe GE made this symbolic move because CEO Jeff Immelt is in bed with Obama, plain and simple.  Obama appointed Immelt to his Economic Recovery Advisory Board in 2009 to help in the recovery (how's all that working out for ya...?)  and then appointed him chairman of his outside panel of economic advisers in 2011, so they're buddies.  No surprise at the results, though, as in the time since Immelt replaced Jack Welch, GE stock has gone from $60 a share to $22.  Brilliant choice!!
Apr 25, 2013 11:00AM
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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.

Apr 25, 2013 1:29AM
Apr 25, 2013 1:27AM
Apr 24, 2013 10:34PM
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You have a brother that has a million dollars, and might be buying guns with it...Hmmmm.

By chance have you got an address???   Just sayin'

 

Think I would waited another week or two for the stock to go back up 4-5%..but anyway,

About that address, we won't tell nobody.

Apr 24, 2013 10:36PM
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Crazy, I think GE can buy the Obamas 4 or 5 times over, Even Jeffy can.
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