Hartford Business.com
July 05, 2008
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News that GE Money plans to quit the consumer RV lending business sent shares of recreational vehicle manufacturers lower last week.
The decision by the consumer finance unit of Fairfield-based General Electric Co. was the latest bad news for an industry already hit by soaring gas prices, declining home values and falling consumer confidence.
RV makers Thor Industries Inc., Winnebago Industries Inc., Monaco Coach Corp. and Fleetwood Enterprises Inc. all slipped after the Wall Street Journal reported that GE Money planned to pull back from the low-margin business.
Stopping Aug. 1
GE Money told the companies that it plans to stop making consumer loans for RVs and certain marine purchases as of Aug. 1.
A spokeswoman for GE Money said her company had explored the possibility of selling its RV/Marine book of business but ultimately decided that winding down the business was a better option.
The loss of GE Money as a lender for RV purchases means the lenders who remain in the business will have to pick up the slack. The Wall Street Journal reported that an analyst for BB&T Capital Markets said GE Money was the third-largest financing source for RV purchases by consumers with about 12 percent of the market.
This year has been the worst since 1992 for RV makers, Craig Kennison of Robert W. Baird & Co. wrote in a research note.
The analyst told the Associated Press that GE Money plans to cut ties with RV maker Thor Industries’ finance unit, Thor Credit, which now plans to establish links with another lender.
Meanwhile, GE Money also announced last week a multi-year relationship with Boyles Distinctive Furniture to provide consumer financing services through the retailer’s Carolina locations and online store.
GE surprised Wall Street last month when it reported earnings that failed to meet expectations. Since, the company has said it intends to get out of some of the more volatile areas on finance. It is expected to sell up to $50 billion in consumer and commercial finance assets this year.
The Associated Press contributed to this report.
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