FAIRFIELD, Conn. – GE Money will discontinue offering loans for the purchase of consumer boats, it was revealed Friday. The move appears to be part of a broader effort by GE to reduce its involvement in the shaky consumer finance sector, according to analysts.
In an interview this morning, Cristy Williams, GE Money vice president of communications said, “We looked at a lot of different options and based on the environment we’re in, we ultimately had to determine where we needed to invest our resources. We determined we needed to discontinue programs (in marine consumer lending).”
A selection of marine-related products will still be able to be financed through GE Money’s powersports and outdoor power equipment portfolios, including trailers and loose engines.
Although analyst Ed Aaron of RBC Capital Markets estimates GE’s market share at around 10 percent, “GE’s exit alone should not substantially affect the lending environment, as we think there’s still enough lending capacity to absorb GE’s volume,” he said.
GE will continue to service existing loans and the company accepted credit applications, which it will fund through July 3, 2008, through yesterday.
“We’ve tried to make a good transition plan for our dealers,” Williams said. “We set up a three-month timeline and tried to do the best we can to exit and make it as easy a transition as possible.”
GE Capital Solutions Commercial Distribution Finance will still work with dealers for their commercial finance needs, Williams said.
GE Money also discontinued consumer lending in the RV sector.
As a result of the move, GE will lay off less than 100 people at its Irvine, Calif., and St. Paul, Minn., offices, according to Reuters.
And if and when the market turns around, would GE Money consider re-entering the marine consumer lending market?
“It’s hard to say,” Williams said. “We’re just having to take steps with the current situation.”
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