• Oct 28th 2009 at 10:29AM
  • 22
GMAC has received $12.5 billion in U.S. Treasury loans since last December, but that sizable amount of cash may not be the last of government assistance. The Detroit News is reporting that General Motors' finance arm could receive between $4 billion to $5.6 billion by November 9 in order to satisfy more stringent government mandates to have sufficient cash on hand in the event of a prolonged recession. GM's financing arm said in May that it was attempting to obtain the additional cash by means other than the federal government, but private financing never came.
Back in May, the government loaned GMAC (which has been converted to be a bank holding company in order to be eligible for TARP loans) $7.5 billion while also taking a 35% stake in the company and appointing two directors. The new loans will likely mean that Uncle Sam will take a larger stake in the company.

On the surface the loans look like another huge helping hand for GM, but the situation is quite a bit more complicated than that. $4 billion of those dollars were loaned to GMAC to assume some of the loans given by Chrysler Financial, which will cease to exist by 2011. GMAC has taken over primary vehicle lending for Chrysler dealers as part of the Pentastar's bankruptcy. GM also sold 51% of GMAC to Cerberus Capital Management back in 2006, so the General hasn't even been a majority owner of its finance company for well over three years.

[Source: The Detroit News]

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    • 1 Second Ago
      • 5 Years Ago
      @ Sea Urchin

      I might have missed the sarcasm, but Ally is GMAC. They changed names to hide from the shame... or really just to trick the general public.
      • 5 Years Ago
      Just remember the next time you see a 0% ad from Gov't Motors or Crisisler, that its more of your hard-earned tax dollars going down the drain!

      Also, if you ever see a TV commercial for the "fine print" ad by ALLY BANK, its really GMAC hiding behind the covers...
      • 5 Years Ago
      God damn. Just let the empire collapse already so we can start rebuilding it. The government is doing nothing but delaying the inevitable with the continued bailouts and the longer the wait the longer the fall is going to be.
        • 5 Years Ago
        No rebuttals?
        • 5 Years Ago
        GM and the government are just following the example of the ignorant general populace. That is, for years and years, people have thought nothing of getting deeper and deeper into debt to maintain the status quo and their standard of living. You were just laid off your manufacturing job, but you want a new big screen TV? Just put everything on a credit card! Credit cards maxed out? Get a home equity loan!

        Keep piling it on, but something's gotta give...
      • 5 Years Ago

      $12,500,000,000 = 1,041,666 brand new Chevy Aveo's!

      • 5 Years Ago
      We'll never get out from under this landslide. The cars being touted as GM's salvation will be lucky to carry them one year into their model lives. The LaCrosse had promise on paper, but everything I've read about real-world experiences make it sound very underwhelming. The Camaro is good at what it does, but that design, much though I love it today, is going to age so poorly that it will be the mid-90's 5.0 Mustang of modern muscle cars. It's going to seem so anachronistic in two years that you'll snicker when one drives by. And what else do we have to look forward to? The Volt? Give me a break.

      There is one place and one place only that GM can ever hope to compete on and it's price. They'll have to come up with products that undercut the competition in every segment and hope that people stay broke enough to send some business their way. I think it's hillarious that the accusations against GM throughout the last decade have always been, "they don't make cars anyone wants," yet the very vehicles the political hacks pointed to were the only GM products I'd ever consider touching: Tahoe, Suburban, Silverado (ditto the GMC versions) and Corvette.

      Nobody drives an Aveo, or a Cobalt or an Impala because they want to. They drive them because they either didn't have the option or didn't care enough to drive something else. That's not an enviable product positioning situation. Good automakers with desirable products are struggling in this economy - how can GM possibly hope to compete? Of course Obama would sacrifice Sasha and Malia on an alter to the Gods of populism before allowing this beached whale to draw its last breath on his watch so we'll have to be content to watch him and his cronies funnel the hopes and dreams we've worked so hard to one day pay for into life support for his Pyrrhic victory.
        • 5 Years Ago
        Let's see...

        Camaro, Volt, GMC, Aveo, Obama, and even a little virgin sacrifice in there.

        Yup, that's right folks, we have a GM hater Grand Slam!! Round of applause for the contestant!
        • 5 Years Ago

        I know it's convenient and mindlessly simple to challenge statements like mine with trite comments accusing one of being a GM hater and therefore somehow unqualified to take umbrage with what clearly has been and is becoming ever more so a fiscal and policy disaster, one which we have our current Commander in Chief, and his rather obtuse response to matters of serious national and global implications, to thank for.

        I would urge you, however, to remove yourself from the insular box of the lock-step mindset you have resigned yourself to, and consider the very real possibility that this company does not now, and will not any time soon, produce mainstream passenger cars that posses much in the way of redeeming virtues beyond their highly-incentivized price points.

        There are only two outcomes for GM and neither of them are to surpass the world's leaders in producing quality automobiles. One, they will be an interminable drain on national resources and the incomes of hard working American citizens, or two, they will limp along another five or ten years until perhaps we will have some leaders in office with the backbone to say, "enough is enough." I would hope that respect for your fellow countrymen would outweigh some jingoistic sense of blind support for a broken, anachronistic emblem of a bygone America, but selfish pride and peoples' aversion to admitting when they are clearly wrong are difficult mental barriers to breach.

        As for GMAC, they remain inextricably linked to the larger morass in the same way that McDonald's cannot help but be influenced by the condition of the beef or potato market. Part of GM proper or not, they are, indeed, part of the problem.
        • 5 Years Ago
        No, continuing your rants will not win you the bonus round.
        • 5 Years Ago
        This comment has absolutely NOTHING to do with the post.
      • 5 Years Ago
      Spinning off GMAC was one of the worst ideas to come out of GM. For awhile there, GMAC's profits were keeping GM afloat. And when the credit crunch came, GM dealers couldn't get financing out of GMAC.
      • 5 Years Ago
      • 5 Years Ago
      Whoo Hooo! More corporate welfare on the taxpayers dime!

      • 5 Years Ago
      In other news, Obama motors is closing divisions of GM here in the USA. Obama and his CZARS are telling owners of dealerships they must close their business. And Obama motors is using our money to invest MORE in South Korea for design, engineering, and production!

      YIPPIE, at least the UAW is being taken care of!
      • 5 Years Ago
      This is so disgusting it enrages me to NO END.

      Keep printing money, printing money, printing money, higher and higher taxes, billions of OUR MONEY wasted on pork and special interests and "green" programs....when will it end?

      Welcome to the USSA, Komrades.
        • 5 Years Ago
        you mean your posts: "This is so disgusting it enrages me to NO END."
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