Carefree RV Resorts Seeks Expansion Funding

April 23, 2012 by · Leave a Comment 

National RV Communities LLC (NRVC) is seeking to finance an aggressive acquisition plan by tapping the private equity market for up to $400 million in new capital.

Woodall’s Campground Management reported that Scottsdale, Ariz.-based NRVC, doing business as Carefree RV Resorts, has held informal talks this spring with potential investors and has scheduled four formal sessions this week in New York City.

“It’s an exciting time. The initial response we have been getting is phenomenal,” said David A. Napp, NRVC chairman and CEO.

The new capital would help NRVC go forward with its plan to double in size within the next five years.

Founded in 2005, NRVC is the nation’s 10th largest owner/operator of destination RV and manufactured housing (MH) communities in the U.S. and Canada with 58 communities containing more than 13,300 sites. Of the 58 properties, 46 are located in Florida. Other properties are located in Texas (4), New Jersey (3) and one each in California, Ontario, Massachusetts, Arizona and North Carolina.

Napp told Woodall’s Campground Management that his company has its eye on a number of prime parks across the U.S.

“I have a priority list,” he said. “Once the capital needed is secured, I’ll be paying some people some visits. A good number are in Florida; some are in California and Arizona. The Eastern Seaboard also represents some great opportunities, like Myrtle Beach, Cape May and Cape Cod.” He was not more specific about locations of prospective acquisitions.

“A real driving force is being on or close to water,” he added.

Historically, the company has sought properties in key destination vacation markets that have a proven history of attracting both leisure travelers and retirees seeking warm weather.

NRVC wholly owns 47 of its RV and MH communities and owns a 20% interest in the remaining 11 MH properties, pursuant to a joint venture with GE Capital (National Home Communities or NHC).

The 47 RV and MH properties total 11,500 sites with a gross market value of approximately $380 million, according to an executive summary of the NRVC operations. The 2012 budgeted net operating income is approximately $26 million, including new acquisitions.

According to Woodall’s Campground Management, NHC owns and operates 11 MH properties located in Florida totaling 1,800 MH sites with a gross fair market value of approximately $83 million. The 2012 budgeted net operating income of these 11 MH properties is approximately $5.2 million.

Napp projects 2012 revenues from all 58 properties to reach $56 million and operating expenses to total $24.7 million, yielding net income of $31.2 million.

He places the fair market value of the combined properties at $462 million.

NRVC is owned by its management team and Almanac Realty Investors, formerly known as Rothschild Realty Inc., a New York City-based real estate investment adviser to public and private institutional pension plans, endowments and foundations. Almanac has invested $115 million in the company since 2005.

GE Capital has provided some $190 million during its long-term relationship with NRVC, Napp added.

Napp said he and founding partner Colleen Edwards are excited about their future in the RV and MH business.

“If the first quarter is any indication, we are seeing stabilization if not a slight upswing in our business,” he said. “I think the opportunities are good out there. We have done well in the recession. We are lining up all the elements for our next level of growth. Over the last 18 months we have analyzed our business internally and decided what we need to do to double our size over the next three to four years.”

In a somewhat related development, Napp noted that Carefree RV Resorts recently partnered with Resort Data Processing Inc., which will provide property management software and reservation software.


Carefree’s principals have a 17-year track record in the destination RV resort and MH industries. They have:

• Acquired and operated 106 RV and MH properties comprising over 30,000 sites.

• Raised over $250 million in private equity and borrowed approximately $880 million in mortgage debt for acquisition financing and refinancing.

• Become one of the first groups to bring institutional capital into the RV resort sector.

• Launched three national destination RV resort brands (Encore, Sunburst and Carefree).

• Operated two park model and manufactured home sales companies with over 2,500 new and pre-owned homes sold since 1996.


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GE Capital Adds Depth to Online Inventory Tool

November 7, 2011 by · Leave a Comment 

GE Capital, Commercial Distribution Finance (CDF), today (Nov. 7) announced upgrades to the Customer Online Management System (COMS), its proprietary inventory management tool.

According to a press release, the newest version provides manufacturers with their most-requested enhancements. “These new capabilities make it easier and faster for them to manage the inventory financing programs with their dealer networks,” the release stated.

“We know that our customers see COMS as the centerpiece of their inventory management systems,” said Jeff Malehorn, president and CEO of CDF and GE company officer. “That’s why we took their input to heart. The result is a significantly upgraded version of COMS with nearly 60% more features.”

A business of GE Capital, Americas, CDF provides financing that allows dealers in the U.S. and Canada to stock inventory from a wide variety of manufacturers and distributors of consumer durables such as technology and outdoor power products, electronics and appliances, recreational vehicles, boats and motorsports.

Manufacturers can now choose to receive alerts via COMS about key account developments. For example, they can be notified when their dealers are approved for funding, which helps keep the supply chain moving. They can also personalize COMS according to their own needs by choosing the most important information for display.

In addition to transactional information, COMS offers analytical insights by making CDF’s business intelligence tools available in one place. Manufacturers can target sales opportunities and assess risk in their dealer networks using these tools. By analyzing real-time information, manufacturers can examine trends related to dealer performance, including receivable outstandings, credit line utilization and repayments. In addition to assessing the financial health of dealers, manufacturers can gauge the popularity and turn-over rates of various models.

Other new features include:
• Expanded billing capabilities, including online one-click payments and electronic billing statements that can be downloaded.
• Enhanced search capabilities.
• Modern design that enables easier and faster navigation.
• Self-service administration that allows customers to update access locally.

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GE Capital Employing RV|ID in Dealer Services

October 3, 2011 by · Leave a Comment 

GE Capital, Commercial Distribution Finance (CDF) has selected RV|ID to enhance its floorplan collateral management services for recreational vehicles.

According to a press release, the global positioning system-based (GPS) service will increase the ease and speed of doing business for both manufactures and dealers by providing real-time mapping, reports and alerts on RV assets in the U.S.

“This is an innovative service that can be used industrywide to efficiently and effectively monitor inventory,” said Pete Lannon, managing director for CDF’s RV business. “GE Capital is pleased to introduce new technologies like RV|ID to our customers — one more way we’re providing them with value beyond money.”

Developed by Red Lantern Labs of Solana Beach, Calif., the system provides RV makers with real-time logistics information as the assets move from factory to dealer to enable the monitoring of retail-level inventory and shelf space. For dealers — especially those with rental businesses — RV|ID provides mileage and usage information to allow them to better service and maintain their fleets. Similarly, CDF will be better able to track assets prior to retail sale.

“We’re pleased to be able to provide this important new tool to GE Capital,” said Jon Corn, president of sales and business development for Red Lantern Labs. “Using RV|ID, a manufacturer can improve production logistics and increase customer satisfaction while dramatically reducing its lemon law exposure; and a dealer can use RV|ID to improve inventory management. It’s a true win-win situation.”


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GE Capital is ‘Weathering the Financial Storm’

September 8, 2011 by · Leave a Comment 

Jeffrey Immelt

Editor’s Note: The following story was written by Bob Sechler and was published by The Wall Street Journal.

GE Capital nearly sank General Electric Co. during the financial crisis. The unit faces an uncertain regulatory future and has almost nothing to do with the conglomerate’s other businesses. And Chief Executive Jeff Immelt is standing by the business.

Mr. Immelt acknowledges that he let the lending operation grow too large, calling that lapse the biggest regret of his 10 years as CEO. He also says many investors, including some big ones, would rather the company get rid of the operation.

But he believes GE can make lots of money from a safer GE Capital, focused on business loans to midsize companies, and he’s willing to let the unit account for as much as 40% of GE’s profit. That disagreement, he says, is the main factor holding back GE’s stock.

“I think it is rediscovering with investors the value of financial services,” Mr. Immelt says when asked what it will take to get the company’s share price rising again. “We obviously think it is worth more than they do right now. I think that is only going to come with time.”

GE Capital, which accounted for about a third of the parent company’s revenue last year, is a significant lender in its own right. The unit’s $606 billion in assets make it bigger than all but seven U.S. banks, and it dwarfs the lending arms at other industrial companies, such as Caterpillar Inc., whose financial-services unit has $30 billion in assets.

GE Capital relies on the financial markets rather than deposits to fund its loans. When that funding started to dry up during the financial crisis, GE lost its triple-A credit rating, saw its stock fall below $6 and had to slash its dividend.

The finance unit now is on significantly firmer, longer-term footing—thanks in part to paring back its reliance on short-term borrowing—and problem loans have been contained. But in a sign the crisis isn’t fully in the past, the U.S. regulator for mortgage giants Fannie Mae and Freddie Mac sued GE and 16 other big lenders Friday aiming to recoup billions of dollars in losses on soured mortgage loans.

“There’s a negative attitude toward financial stocks,” says Eric Boyce, a fund manager at Hester Capital Management in Austin, Texas, which owns GE stock. “That’s an anchor.”

While many industrial companies have set up so-called captive-finance units to help customers buy the companies’ goods and services, GE jumped into lending for its own sake. Less than 5% of GE Capital’s loans are made to help companies buy the conglomerate’s products. The unit puts the bulk of its effort into areas that include consumer finance, aircraft leasing and lending to midsize businesses.

The unit has been downsizing and sharpening its focus since the financial crisis. It has stepped back from real estate, where GE Capital had been among the world’s largest property investors, and sold off consumer-finance operations in the emerging markets of eastern Europe and Latin America. A key sign of progress should come next year, Mr. Immelt says, when he expects GE Capital to resume paying a dividend to GE proper.

Now GE has to convince investors that it has the finance unit under control and that the investment is worthwhile, Chief Financial Officer Keith Sherin says.

GE also has to navigate a new regulatory framework. Oversight of GE Capital in July shifted to the Federal Reserve, which is expected to be more demanding than the unit’s previous regulator, the Office of Thrift Supervision, which was dissolved in the wake of the financial crisis.

“We have weathered the storm as well as anybody and we are well positioned to come out the other side,” Mr. Immelt says. “Investors are going to have to triangulate what they think that set of financial-service earnings are worth.”


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GE Capital: ‘Innovation Means Better Service’

July 11, 2011 by · Leave a Comment 

EDITOR’S NOTE: The following is an article authored by Caroline Steele, Growth & Innovation Leader, GE Capital, Americas, and Jeff Malehorn, president and CEO of GE Capital, Commercial Distribution Finance, on innovation in today’s retail marketplace.

To most dealers, innovation means having fresh new products to stock in their showrooms. But innovation can also occur by serving customers better, enhancing their experience and bringing them new value. Retailers of everything from appliances to lawn and garden equipment to recreational vehicles have boosted revenues using practical and relatively inexpensive ideas that can be as powerful as new product introductions.

The Innovation Investigation

Broadly, innovation is the development of new ideas but it can also be defined as the process of applying current thinking in fundamentally different ways, resulting in significant change. Apple’s Genius Bar and Best Buy’s Geek Squad are prime examples of the creativity retailers are capable of when they look at their operations with fresh eyes.

Retailers can look for innovation opportunities throughout the value chain but customer interaction may be the most obvious place to start. Define the customer experience as a journey with three stages, each of which offers innovation opportunities. Awareness is when the customer first learns about a product, service or brand. Commitment is when the customer chooses to buy it. Usage is the actual use of the good or service over time.

A company might ask: What is the current customer experience with our product in the awareness stage? Perhaps raising awareness involves direct mail, event participation, advertising, cold calling, or social media. Next ask: What are the customers’ frustrations with this experience? Maybe your company doesn’t have an efficient way to route incoming calls so consumers can reach a human quickly; maybe they receive too many pieces of direct mail; maybe sales reps call at inconvenient times.

Probing further, a company exploring the awareness stage might ask: How do customers want to learn about our product or service? It’s possible that consumers want a single point of contact to call with questions. With this groundwork complete, the company can finally ask: How can we fulfill that desire? In this case, the solution might involve building a web page with the local representatives’ contact information. Or maybe the phone system can be re-programmed to route calls according to consumers’ zip codes.

Non-product innovation can take many forms but there are three areas that dealers can tackle easily and relatively inexpensively: Marketing and selling through the Internet; promoting a lifestyle/mood around a particular product or brand; and aligning with affinity groups.

Non-Product Innovation #1: Selling over the Internet

The Internet is how many customers want to learn about products and services. One RV dealer who embraced Internet sales grew revenues from a few million to $100 million in just seven years. He turns over his inventory at more than twice the industry average and has increased his credit line more than ten-fold during that time period.

This kind of success requires more than simply building a Web site. It requires analyzing the entire shopping experience both in-store and online. This particular RV dealer has a team of sales people dedicated solely to handling questions and orders coming in over the Web. The dealer also pays for various search engine optimization techniques that return its listing in relevant Internet search results.

Retailers that don’t want to go to the expense of enhancing their own Web sites are selling their wares on high-traffic Web sites such as eBay and Craigslist, which are proving to be an efficient way to move older or difficult-to-sell merchandise.

Non-product innovation #2: Promote the lifestyle

The RV industry fully embraces the concept of experiential marketing with mock campsites in-store so potential customers can absorb the experience. RV dealers also understand the importance of extending their promotional activities beyond the showroom. Participating in events such as home and garden shows generates buzz around their lifestyle and run rallies create a clubby atmosphere. Some RV and marine dealers even establish relationships with specific campsites and marinas to give customers preferred access to hot spots.

Non-product innovation #3: Find affinity groups

Instead of marketing directly to a target audience, dealers can build relationships with those who might influence their targeted consumers. For instance, one Texas-based dealer of luxury appliances invites local real estate agents to cooking demonstrations in its showroom so he can highlight his products to those who might provide input to new homeowners planning kitchen remodeling projects. These agents are likely to be friendly with area contractors too – another affinity group.

A long-time appliance dealer in Montana launched a store that sells the newest electronics such as Apple computers and iPads. By appealing to a young, technologically savvy demographic, and by subtly promoting its nearby appliance store brand, the company hopes to cultivate a new generation of appliance consumers.

On the Internet front, consumer brands such as Victoria’s Secret and The Gap and retailers such as Sears are realizing the benefits of building relationships via social media, especially Facebook and Twitter. Creating a digital community of local enthusiasts for your products may attract younger generations. To encourage online interaction, some retailers offer a small prize or a limited-time-offer discount.

Ultimately, doing business in the 21st century means new players and new rules. Dealers have realized they can’t rely solely on manufacturers to deliver innovation in the form of new products. To create a true strategic advantage, they must continually pursue innovation in their own showrooms.

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GE Capital Rolling Out NATDA Show Special

July 6, 2011 by · Leave a Comment 

GE Capital Commercial Distribution Finance (CDF) will offer a show special for all orders booked at the 2011 North American Trailer Dealers Association (NATDA) Trade Show set to run Sept. 8-10 at the Dallas Convention Center.

The company emphasized that the offer will be valid only during the three show days for dealers in attendance. The program is limited to manufacturers and dealers active with the

CDF Strategic Industries Trailer Group only. It will extend suppliers’ standard financing terms by 60 days; this includes dealers in the light- and medium-duty enclosed cargo, open utility, dump, auto hauler and horse-livestock trailers. This program is only available at the 2011 NATDA Trade Show.

GE will have staff on site for dealers wanting to take advantage of the show special. For credit lines up to $300,000 GE has implemented a streamlined approval process. Trailer dealers will be able to apply with GE at the show, and if approved will be eligible for the plus-60 program.

GE will also host a free workshop and seminar on its new floor plan program on Sept. 8, at the trade show. The class will teach dealers about floorplan finance, inventory turns, what to expect from their lender, when to turn aged inventory back to cash and online management tools for inventory control. GE will make sure dealers understand the new GE programs and how to make them work for their dealership.

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GE Capital Expanding Chicago Work Force

May 27, 2011 by · Leave a Comment 

GE Capital plans to nearly double the number of its employees in Chicago to more than 2,000, in part because of Mayor Rahm Emanuel’s economic plans for the city, according to an Associated Press report.

Officials with the financial services arm of General Electric joined Emanuel at a news conference, saying 500 of those new jobs – skilled commercial, technical and regulatory positions – would be added within the next year. The other 500 jobs would come in the next few years.

The company also is looking for a new office in Chicago to accommodate the growing work force.

During his mayoral campaign, Emanuel touted his relationships with business and government leaders from his time as an Illinois congressman and when he was President Barack Obama’s chief of staff. Monday’s news conference served as a reminder of his national stature, as well as a pep rally for Chicago.

Emanuel, who is trying to attract business to the nation’s third largest city to help overcome its budget shortfall, downplayed the effect his relationship with GE CEO Jeff Immelt may have had on the GE Capital decision. However, the mayor mentioned that because he had Immelt’s phone number and e-mail address, he was able to set up a meeting in March.

“Having a personal relationship obviously didn’t hurt,” Emauel said. “It pushed it a little, tilted it a little.”

But, he said: “If this didn’t make economic sense to GE and their bottom line, they wouldn’t have done it. … You’re not going to do this as a favor.”

Chicago’s projected budget deficit next year has been estimated at $500 million to $700 million.

One GE executive said Emanuel’s “economic platform” helped prompt the company to bring more jobs to the city, saying Chicago is the right place to expand.

“There is a wealth of financial services and banking talent available to us in the city of Chicago at a very good value,” said Daniel Henson, President and CEO of GE Capital, Americas.

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British Demand for Big Ticket Items ‘Subdued’

May 5, 2011 by · Leave a Comment 

Demand for big ticket leisure items such as caravans (RVs), sailing boats and leisure motorcycles in the United Kingdom improved in the first quarter of 2011 but growth remained extremely weak for the second successive quarter, according to data released today by GE Capital.

Sales activity grew by just 0.58% in the three months to March, following a 0.13% increase in the fourth quarter of 2010. Across Europe the GE Capital Big Ticket Leisure index rose by 3.41% in the first quarter of 2011 and remained significantly higher than UK growth for the second successive quarter (Q4 2010: 0.13% vs 9.68%).

In Europe, a return to modest growth in Q1 follows a surprisingly strong performance in the fourth quarter of 2010, which had been the second largest increase seen since the index began at the beginning of 2008, but returns the index closer to the quarterly growth rates seen in the second and third quarters of 2010. The sustained recovery that had been seen since August 2009 also looks to be losing steam across Europe as continued macro-economic concerns hit consumer confidence. Prior to August 2009, sales activity showed a sustained decline as the global recession hit hard at European consumer demand for big-ticket items.

Despite recent stagnation, UK sales activity relating to big ticket leisure items has now grown for seven straight quarters, with activity in August 2010 returning to and eclipsing levels last seen in January 2008.

The GE Capital European Big Ticket Leisure Index offers a monthly view of consumer demand for ‘discretionary’ high value leisure goods, such as motorboats and yachts through to caravans and quad bikes – using the length of time it takes for these products to sell. The Index is compiled using data from more than $4 billion of annual sales, financed by GE Capital’s distribution finance unit, from a wide range of manufacturers across the European leisure industry.

Despite slowing growth, the European index climbed to its highest level since September 2008 on the back of a sustained recovery in activity from the August 2009 low point. Activity had shown a strong recovery in the last quarter of 2010, driven by strong activity in the recreational vehicle and motorsports sectors. That growth slowed in the first three month of 2011 in the most part due to a slight overall decline in the motorsports constituent of the index being only partially offset by strong growth in the marine sector.

In the UK specifically, sales activity has struggled to remain positive over the past two quarters following four successive quarters of over 5% growth. The UK index fell in December for the first time since August 2009 and was also negative in January as cold weather and falling consumer confidence hit activity.

“For the UK, it seems that the slump in consumer confidence and GDP in the fourth quarter of 2010 and concerns around the austerity measures limiting future growth acted to subdue sales activity on big ticket leisure items. Growth has been very weak for two consecutive quarters and we are seeing monthly declines for the first time since escaping the full force of the recession in 2009,” said Stephan Caron, Commercial Leader at GE Capital UK. “What’s positive, however, is that activity is still growing and that we are now above levels of activity seen in early 2008.”

GE Capital is uniquely placed to develop this indicative index as the company is a leading provider of asset finance, inventory finance and working capital/cash flow financing to manufacturers and dealers across Europe.

“As a leading European market player in distribution finance, which provides manufacturers with working capital secured against finished goods from the moment they leave the production line through the dealer network until sale to the end customer, we have a unique insight into the activity of both manufacturers and dealers across a wide range of industries,” said Caron, “We have worked hard to develop intelligent process technology that is embedded into our customer systems and gives them a real-time view of which products are selling, in which countries and through which dealers. These systems also give us a fantastic macro view of economic activity and we’ve used these to build the index.

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GE Posts Profit Surge; Capital Arm Nets $1.8B

April 21, 2011 by · Leave a Comment 

General Electric Co. posted a fourth straight quarter of profit growth, beating analysts’ estimates, as equipment orders increased, and boosted the dividend for the third time since July, Bloomberg BusinessWeek reported.

First-quarter profit from continuing operations rose 58% to $3.58 billion, or 33 cents, excluding pension results, up from $2.26 billion, or 20 cents, a year earlier, GE said. That exceeded the average estimate of 28 cents a share from analysts surveyed by Bloomberg.

GE Capital, the company’s lending business, continued to recover from the financial crisis, with profits more than tripling profits to $1.8 billion in the quarter. GE’s transportation, health care, aviation, and home and business solutions businesses also posted increased earnings.

CEO Jeffrey Immelt plans to speed sales and profit growth this year and in 2012 by focusing on energy, aviation, transportation and health care as well as a slimmer GE Capital. He is spending on research and more than $12 billion of acquisitions since October, mostly in energy, as he builds technology offerings and the oil and gas division.

“GE has emerged from the recession a stronger, more competitive company,” Immelt said in the statement.

GE gained 2.9% to $21 at 6:43 a.m. before regular New York Stock Exchange composite trading.

The dividend will rise 1 cent to 15 cents a share payable July 25 to shareholders of record at the close of business on June 20, Fairfield, Connecticut-based GE said.

The company’s total order backlog, a gauge of future profitability, was $177 billion, exceeding the fourth quarter’s $175 billion. Orders at large-equipment divisions including energy, aviation and health care rose 13 percent to $19 billion.

Sales Rise

Sales rose 6.2% to $38.4 billion, helped by more selling days as the quarter ended April 3 rather than March 28 a year earlier. Revenue included proceeds from the disposition of NBC.

“A few extra days will not normally make much of a difference in the big lumpy equipment businesses (unless you luckily catch an extra lump),” Jeffrey Sprague, co-founder of Vertical Research Partners, wrote in a note to clients this week.

The sale of NBC generated 4 cents a share, tempered by 3 cents in restructuring, acquisition and disposition costs, GE said.

The company doesn’t provide profit or sales forecasts, instead giving investors a “framework” on which to compile their own. Analysts estimated first-quarter sales of $34.3 billion, on average, according to a Bloomberg survey.

This is the first quarter the company has broken out pension costs or benefits in its income statement on a per-share basis. Including a pension cost of $163 million, net income attributable to common shareholders was $3.43 billion, or 31 cents a share.

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GE’s Tax-Bill Imbroglio Just Won’t Go Away

April 13, 2011 by · Leave a Comment 

It seems the imbroglio over General Electric Co.’s 2010 tax bill just won’t go away.

The multinational conglomerate said today (April 13) that a press release announcing that it would give $3.2 billion back to the federal government was a “hoax,” Market Watch reported.

The story said GE would return the money to federal coffers in the wake of a New York Times story that said the company received that much in “tax benefits” for 2010, interpreted by many to mean it had gotten a refund. The faux announcement of the return of those funds to the government had been picked up by the Associated Press, which retracted the piece shortly after GE dubbed it a fake.

Stock futures grapple with mixed data as consumer-spending figures for March are positive, while mortgage applications decline. Bellwether J.P. Morgan Chase’s earnings top estimates.

“One, we didn’t get a refund, and, two, (the press release) was a hoax,” GE spokesman Andrew Williams said.

Representatives of the Associated Press could not be reached for immediate comment. But the news service issued a report to affiliates saying it had received a fake press release via email that included a GE logo and a link to a website that looks like the company’s.

“The AP did not follow its own standards in this case for verifying the authenticity of a news release,” AP business editor Hal Ritter was quoted as saying.

“It’s not really in our interest to fool the media. It’s just the means to an end.’

A group calling itself “U.S. Uncut” claimed responsibility for the hoax, saying it had worked in conjunction with the “Yes Men,” a prankster duo purporting to target “leaders and big corporations who put profits ahead of everything else.” U.S. Uncut calls itself a “grassroots movement taking direct action against corporate tax cheats.”

Mike Bonanno, co-founder of Yes Men, said the groups have issued the fake press releases in order to get the media attention they otherwise would not receive.

“We tell small lies, momentary lies that get a lot of media attention,” Bonanno said. “If GE sends a press release, people listen. If we send a press release, they won’t.”

“It’s not really in our interest to fool the media. It’s just the means to an end,” Bonanno went on to say. “This is a last resort. We wish there was another way of doing it.”

On March 25, the Times published a story that indicated GE had reported worldwide profits of $14.2 billion, with $5.1 billion coming from U.S. operations. The story also said GE paid no U.S. taxes and claimed a “tax benefit” of $3.2 billion, which was interpreted as a refund. It goes on to describe aggressive accounting operations designed to keep GE’s tax bill low.

That story created a furor, bringing GE’s accounting practices under fire. But the piece has come under question from the company itself, as well as from other news outlets. The Washington Post later reported that GE will, in fact, owe 2010 federal taxes.

And the company itself issued this statement Wednesday: “We will file our 2010 tax returns by September. We expect to have a small federal income tax liability. In 2010, GE paid significant federal income taxes for prior years. We also paid about $1 billion in 2010 in other state, local and federal taxes in the U.S.”

GE went to say: “The main reason why our tax rate was so low in 2010, was that we lost billions of dollars in GE Capital, our financial arm, as a result of the global financial crisis. Similarly, in 2009, GE Capital’s losses were so large that the total company lost money on its U.S. operations. GE’s tax rate will be much higher in 2011 as GE Capital recovers.”

GE Capital is a main financing resource for the RV industry.

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GE Capital Exec Sees Boating Recovery in 2011

April 1, 2011 by · Leave a Comment 

Some of the boats displayed at the boat show in Miami.

Some of the boats displayed at the boat show in Miami.

After several years of low tide in the marine industry, 2011 may be the year that finally lifts all boats, Specialty Fabrics Review reported.

“The marine industry is starting to see signs of recovery as we move past the recession,” says Jeff Malehorn, president and CEO of GE Capital’s Commercial Distribution Finance (CDF) at the Miami International Boat Show, held Feb. 17-21.

A survey released by CDF showed that 38% of respondents expected sales to increase in 2011, and 54% said the best time for dealers to increase inventory levels is now. Sales of lower-ticket items, such as aluminum boats and recreation boats, are rebounding faster than luxury yachts.

The biggest obstacles to growth, according to the marine dealers and manufacturers surveyed, were consumer demand (70%) and reduced level of showroom and field inventory (40%).

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Immelt Defends GE’s Lower U.S. Tax Payments

March 31, 2011 by · Leave a Comment 

Jeffrey Immelt

Jeffrey Immelt

GE CEO Jeffrey Immelt said the company has paid lower taxes over the past few years than what a company would typically pay mainly because of $32 billion in losses suffered by its GE Capital unit after the U.S. financial crisis of 2008.

He said GE’s taxes are expected to increase in 2011 as the company continues to recover and rebuild its profits, Market Watch reported.

The nation’s sixth-largest company has drawn sharp criticism after a New York Times article on how GE manages to reduce taxes — in 2010, it received a $3.2 billion benefit — often by lobbying Congress for special tax breaks.

The company has disputed many of the claims in the article and said it’s fully in compliance with U.S. law.

“Like any American, we do like our taxes low,” Immelt said.

Immelt offered a defense of his company during a speech at the Economic Club of Washington to outline how the U.S. can improve its economy and raise job growth. Earlier this year Barack Obama appointed Immelt to head the president’s Council on Jobs and Competitiveness, a somewhat controversial decision given the company’s extensive business with the federal government.

One way to achieve higher job growth, Immelt said, is to reform the domestic tax system like many other nations around the world are doing. He said the U.S. code increasingly discourages the creation of new businesses and investment.

“Our system is old, complex and uncompetitive,” said Immelt, reflecting the view of most American CEOs. He said he was willing as a chief executive to support reforms that would lower the corporate tax rate while eliminating unspecified loopholes or business tax breaks.

Immelt also said the federal government has to do a better job of getting rid of old and outdated regulations and not just pile new rules onto an already-creaky system of oversight.

Another goal of the jobs council, Immelt said, is to find ways to help small businesses grow. He said the creation of new small businesses after the 2007-2009 downturn is 23% lower than is typically the case following a recession.

Most of the ideas the council comes up with are unlikely to require any congressional legislation, he stressed. The one exception is trade. Immelt said lawmakers should act quickly to pass three pending free-trade deals with Panama, Colombia and South Korea.

“The rest of the world is signing free-trade agreements today as we speak,” he said.

In somewhat of a surprise, Immelt also declared companies are less likely to focus on countries with the lowest wages when deciding where to put a business.

Advances in technology and other factors have made it easier for companies to reduce costs wherever they go. As one example, Immelt said it only costs GE 10% more to operate a call center in the U.S. compared to India, where wages are much lower.

The company is also moving more manufacturing jobs in its appliance business back to the U.S. and plans to create 16,000 jobs at home over the next few years.

“I think the era of globalization around cheap labor is over,” he said.

What’s likely to become an even bigger factor in the future is the educational level of a nation’s workers. Like many business leaders, Immelt said the U.S. has to improve its education system, especially for math and science.

“We have more degrees in sports therapy than electric engineering,” Immelt said.

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Canada’s RV Care Dealer Network Reaches 54

February 15, 2011 by · Leave a Comment 

imageThe RV Care network of dealers in Canada has grown by 12% since last year, bringing the national network to 54 full service locations.

The following dealers joined RV Care over the winter months, according to a news release:

  • Horizon Lussier, Marieville, Québec.
  • Moncton RV Center, Moncton, New Brunswick.
  • Nor-Burd RV Sales & Service, Terrace, British Columbia.
  • Roulottes MLR, Chicoutimi, Québec.
  • RV World, Waasis, New Brunswick.
  • Travellers Rest RV Center, Kensington, Prince Edward Island.

Every RV Care dealer is committed to ensuring that if a customer from another RV Care dealer anywhere in Canada stops in while traveling in their RV and needs help, they’ll receive the highest possible priority service in order to get them back on their way to safely complete their vacation.

“When you look at the map of where RV Care dealers are located, you can see that our strategy is developing well to have locations along all major RV routes and destinations across Canada” says Earl Manning, vice president of RV Care. “We continue to look for the right dealers in the right locations to grow the RV Care network for our traveling customers.”

As well as the added value that the national service network provides in the selling process, RV Care dealers also enjoy the benefit of strong relationships with a variety of top quality suppliers to the Canadian RV industry. This past year RV Care and GE Capital announced a new partnership program to help strengthen their dealers’ floorplan operations.

Just last month it was announced that RV Care dealers are the featured retailers across Canada for the public launch of the EFOY Fuel Cells that provide reliable off-grip power while producing no emissions and no noise.

The early retail shows are giving every indication that the RV Care dealers across Canada should be gearing up for a busy and profitable year in 2011.

For more information visit

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Ally Financial Will Become ‘Major RV Player’

December 13, 2010 by · Leave a Comment 

Tim Russi

Tim Russi

National wholesale and retail lender Ally Financial Inc. made its presence known at the 48th Annual National RV Trade Show, Nov. 30-Dec. 2 in Louisville, Ky., with stand-alone booths and desks within the displays of Thor Industries Inc. with whom Ally established a “preferred lender” relationship earlier this year.

“We wanted to be in Louisville to support the industry. If you are going to be a major participant in it, there are obligations to support the industry event,” stated Tim Russi, Ally’s executive vice president for North American Operations, who was joined at the show by more than 20 associates from the Detroit-based lender.

“With the announcement that we are getting into wholesale financing — and knowing the season that we are about ready to get involved in from an RV perspective — we want to make sure the dealers have us on their minds,” said Russi.

Indeed, Ally has its sights set on becoming a major factor – a national-scale RV industry lender – along with GE Capital and Bank of America. And that’s pretty big news, considering Ally Financial extended $22.3 billion in U.S. auto consumer financing for the first nine months of 2010, making it likely the No. 1 ranked provider of new car financing in the U.S. in 2010.

“We want to be part of the upswing of this industry,” Russi, a former Bank of America executive who oversees Ally’s automotive and RV lending services in the U.S. and Canada, told “Some lenders have left the market while others in it are potentially retracting, and there are not many providers in the industry. So, we think the time is right to enter the market.”

In a way, Russi points out, Ally has been in automotive financing as GMAC for a long time. Formerly the captive finance company of 90-year-old General Motors Corp., Ally became an independent financial services company in 2006 and a bank holding company in 2008, launching Ally Bank in May of 2009. Ally’s parent company changed from GMAC Inc. to Ally Financial Inc. in May, followed by the rebranding of its automotive finance business in July.

In 2009, meanwhile, President Obama named Ally Financial as preferred financial provider for Chrysler Group LLC. “We have preferred provider relationships with GM, Chrysler, Saab, Fiat, Suzuki and Thor,” said Russi. “And we’re looking to expand our relationship with other OEMS as well, which is an important concept as we diversify our book of business from what was historically almost 100% GM. As a bank, what you’d like to see is a diversified business.”

Ally Financial offers a variety of auto-financing products, indirect retail financing for new and used vehicles and RVs, auto leasing as well as wholesale financing and remarketing services.

Leading the RV industry lending team are some familiar faces, including the bulk of the former Thor Credit staff. Industry veteran Ed Arienti runs the retail sales force for the RV sector as director of recreational finance sales and teams with Rich Morrin, commercial operators leader, for RV dealer wholesale financing.

Also key is Mark Manzo, who, as vice president of alliance sales, manages OEM relationships, including that between Ally and Thor.

Ally’s RV industry entry started with an April announcement by then-GMAC Financial Services that it would provide RV consumer financing, working with Thor Industries Inc. as a preferred retail lending provider.

Then, on Nov. 23, right before the Louisville Show, Ally announced that it would diversify into wholesale financing, focusing from the outset on Thor’s dealer network.

“We benchmarked current options and needs in the industry and will offer a very competitive wholesale financing product for RV dealers,” Russi stated. “Our program is tailored to the recreation vehicle business with attractive terms and flexible credit lines that will accommodate the seasonal fluctuations in RV inventory. We view our retail and wholesale financing, along with remarketing tools, as a full-service offering for dealers.”

Qualified dealers may obtain wholesale financing from Ally Financial for all or a portion of their inventory, reported Ally, which currently extends retail financing through dealers in about 40 states and plans to expand its RV retail financing nationwide by the end of the year.

“The way we like to create a relationship is a full spectrum relationship credit offering through the dealer,” Russi emphasizes. “Everything centers around the dealer. The more we do with them, the better our value proposition is.”

So, is the Thor relationship exclusive to Thor dealers?

“We are not exclusively Thor,” said Russi, “but because of our relationship with them we obviously are going to focus on their dealer network needs first. That’s our entry point into the industry. Keep in mind that Thor dealers — and I think they number 1,200 — represent about 75% of the RV space. We think by focusing there, we are going to build relationships with the majority of the industry.”

When a Thor dealer has multiple brands and sells non-Thor brands, he noted, Ally will still provide retail or wholesale financing for the products of those other branded companies.

Is Ally in it for the long haul?

“We wouldn’t have entered it to exit it,” added Russi. “We’ve got plenty of auto business. We are not going to run out of capacity. We’d like it (the RV segment) to be substantial. We’d like to systematically grow our book.”

The fact that Ally has a dedicated RV sales staff based in Orange County, Calif., is also a testament to Ally’s commitment, adds Russi. “But we also intend to leverage our entire structure into the space,” adds Russi. “If we don’t have someone conveniently located from an RV sales perspective, we will leverage the existing sales force, which is a national sales force of about 200.”

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GE Capital Teams with Spader Business Firm

November 30, 2010 by · Leave a Comment 

Pete Lannon, GE Capital

Pete Lannon, GE Capital

GE Capital, Commercial Distribution Finance (CDF) today (Nov. 30) announced the launch of a new program with Spader Business Management.

Under the program, GE Capital is subsidizing a one-year subscription to Spader True, an online system that allows qualified recreational vehicle dealers in the U.S. to compare their business performance against industry benchmarks on a wide variety of financial metrics, according to a news release.

Spader True is an interactive system that provides a summary of more than 1,500 individual data points in a series of graphic displays, known as dashboards. It allows dealers to compare their performance on a wide variety of detailed metrics related to expenses, sales mix, and profit margins, by department, against industry averages.

“GE Capital wants dealers to have the best financial reporting and forecasting tools to grow their businesses,” said Pete Lannon, managing director-RV for GE Capital’s CDF business. “We are pleased to help make the new Spader True product available to dealers.”

Under the program, GE will pay 50% of the cost of a one-year subscription.

“Spader True contains live data that dealers can start using immediately,” said John Spader, president of Spader Business Management, in Sioux Falls, S.D. “Spader True provides a true measure of businesses performance to show where they are now, where they’re headed and where they need to be for a healthy organization. It was designed to be used by dealers and their management team so that, with one quick look, they can discover what’s working and what needs improvement.”

Dealers can learn more about the system by visiting the GE Capital booth (North Wing Lobby #24E) or the Spader booth (#94 or #308) Nov. 30-Dec. 2 at the 48th Annual National RV Trade show in Louisville, Ky.

About Spader Business Management

Spader Business Management offers a full range of programs, tools and applications to help revitalize businesses, restore optimism and create clarity and confidence for success. John Spader founded the company more than 30 years ago.

About GE Capital, Commercial Distribution Finance

GE Capital, Commercial Distribution Finance is a leading financing provider to manufacturers and their distributors. Programs include inventory financing, asset-based lending, private label financing, collateral management, e-commerce services and related financial products. Additional information can be found online at, or by following company news via Twitter (@GEInventoryFin).

About GE Capital

GE Capital offers consumers and businesses around the globe an array of financial products and services. For more information, visit or follow company news via Twitter (@GECapital).

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