In the wake of the Newtown, Conn. elementary school shooting, another corporation is making adjustments to its business plan. GE’s finance arm, GE Capital, has announced it will no longer lend to gun stores, pulling the plug on nearly 75 retailers.
According to spokesman Russell Wilkerson, GE had already stopped lending to some gun merchants in 2008. Wilkerson said after a “more rigorous audit process in our sporting goods segment in light of industry changes, new legislation and tragic events that have caused widespread reexamination of policies on firearms,” and GE uncovered more businesses that sold too many guns for its comfort, he told Forbes.
While companies are trying to be politically correct in the midst of the gun debate, it appears that GE hasn’t totally gone out of the gun financing business.
GE will continue to lend to other businesses that sell firearms, including Wal-Mart, the nation’s largest seller of firearms and ammunition, and Dick’s Sporting Goods DKS -0.57%.
GE’s finance arm is today the fifth largest commercial-lending entity in the country–accounting for 31% of GE’s total revenue last year ($45.7 billion) as it doled out $107 billion in loans–by delving into niche markets unoccupied by the larger financial institutions.
Shortly after the Sandy Hook tragedy, private-equity firm Cerberus Capital Management, under pressure from investors, said it would move to divest the gun company it owns, Freedom Group Inc., maker of brands including Remington, Bushmaster, Marlin and H&R.
Last week it was reported that Cerberus’s owner, Stephen A. Feinberg, was personally contemplating a bid for the Freedom Group. So much for clearing the conscience.
And for GE, whose headquarters are in Fairfield, Conn., the Wall Street Journal reported that the father of the Sandy Hook shooter, Peter Lanza, is a GE Capital executive.
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