GE Capital Solutions, the equipment leasing and financing arm of
General Electric, has restructured its transportation arm – as well
as two of its other divisions – just five months after its
formation because of customer overlap.
The move has involved Capital Solutions’ transportation arm –
which was formed in January 2008 – being shunted into a new
business called Industrial.
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The move has taken place because of concerns that the transport
finance business, which specialises in leasing commercial vehicles
on long-term contracts, was targeting the same customers as two
other Capital Solutions divisions, construction and
manufacturing.
There are also some crossovers between this transport finance
business and two other GE divisions, GE TIP Trailer Services, its
trailer finance arm, and TLS Vehicle Rental, which provides vehicle
rental and maintenance.
The new business, Industrial, is now comprised of the previously
three separate divisions, transportation, construction – formed 18
months ago, when several companies in this sector were amalgamated
– and machinery. While transportation was only formed in January
this year, previously GE still leased commercial vehicles on long
term contracts.
Construction represents about half of Industrial’s business and
the rest is divided between transportation and machinery.
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By GlobalDataMarie Dunkley, who joined GE from Newcourt, the Canadian IT
vendor finance business, seven years ago, has been promoted from
head of construction equipment finance to head of Industrial. The
three parts of this business do not have their own heads.
Dunkley said: “It has become increasingly clear that there was
significant overlap in the existing and new customer bases for
construction, manufacturing and transportation, with similar
product ranges.”
She added that it was only once transportation had been launched
earlier this year that “synergies” between it and manufacturing and
construction were made clear. “As we went through talking to more
companies, we discovered a lot of synergies between the three
groups,” Dunkley said.
Industrial has been headquartered in Bristol, where equipment
financing is based, and its 20-strong sales team is being located
across sales centres nationwide.
Potential overlaps between TIP, TLS and Cap Solutions’
transportation division may mean these businesses become more
closely aligned in the future, a spokesman told Leasing
Life.
He said: “There was some crossover between GE’s TIP and TLS
businesses. There will be some cooperation and closer links between
the three. If it does happen, however, it will be quite a bit down
the line. We will have to wait for this restructuring to bed in
first. There will be more bedding in needed to ensure Industrial
works well before starting a book in different areas.”
TIP, which is present in 26 European countries, counts Germany
as its largest business where it has 20,000 trailers on lease. Its
UK business has 11,500 vehicles. It is currently deciding whether
to take orders from German company Krone, Europe’s second largest
trailer manufacturer. At present it buys assets from include SDC
Trailers, Dennison and Schmidt Cargobull.
