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General Motors buys Ally Financial foreign operations

Dan Roth — Sat, 24 Nov 2012 17:01:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

In a move that welcomes former pieces of General Motors back into the fold, GM Financial has reached a deal with Ally Financial, formerly GMAC, to buy a piece of the company's international operations. The $4.2 billion deal is for Ally's Latin America, Europe and China operations.

"GM is entering the most aggressive rollout of new vehicles in its history, and this acquisition will make us an even more formidable competitor by ensuring that competitive financing is available to our customers and dealers around the world," says General Motors CFO Dan Ammann. The ability to finance from a captive unit will let General Motors extend better loan terms to potential customers, which the automaker sees as key to closing a sales gap that's between 10 and 15 percent versus automakers who already have their own financing divisions.

GM will be handing over more than $2 billion in cash to GM Financial, and the unit will more than double its liabilities from $12 billion to $27 billion while also doubling its assets to about $33 billion. GM Financial expects to bolster its yearly pre-tax earnings by $300-$400 million. It will take at least six months to wrap this deal up, provided it gets approvals from various oversight agencies. For more information on the deal, check out the official press release below.

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General Motors buys Ally Financial foreign operations originally appeared on Autoblog on Sat, 24 Nov 2012 17:01:00 EST. Please see our terms for use of feeds.

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Treasury suggests GM buy back troubled Ally Financial

Jonathon Ramsey — Wed, 28 Mar 2012 10:30:00 EST

Filed under: Government/Legal, Earnings/Financials

Back when Ally Financial was known as GMAC Financial, the U.S. Treasury gave it $17.2 billion in TARP funds to weather the global economic crisis. GMAC is now Ally Financial, and although it has repaid $5.4 billion of what it was loaned, there doesn't seem to be a clear path for repaying the outstanding amount. Bloomberg reports that Ally's mortgage unit, Residential Captial (ResCap), is teetering on the ledge of bankrupcty, and its banking operations didn't perform well in the Federal Reserve's stress tests that assess a bank's health.

An IPO for the entire company faces dim prospects (one was rumored back in April of 2011), so in a private equity ploy, the Treasury would like Ally to divvy itself up and sell the pieces to unlock value. Estimates are that the pieces could fetch $23.1 to $28.6 billion. The plan is supported by Elliott Management Corp, a shareholder that holds 2.3 percent of Ally stock. However, Ally's CEO and its board don't want to break the company up, and the Treasury - which holds 74 percent - doesn't want to lean on the leadership too hard for fear of "appearing as a heavy-handed owner."

In addition, the looming bankruptcy of ResCap will have an unknown effect on Ally's ability to do anything. Before the mortgage implosion, GMAC's auto unit was struggling and ResCap was restructured as a separate entity so that it wouldn't be dragged down by the captive finance department. The situation is reversed now, with ResCap in trouble and the captive finance arm supporting itself, but Elliot feels that the restructuring won't be enough to shield Ally from perhaps 18 months of litigation and billions in claims.

Ally execs feel differently, but no one will know until the trigger is pulled and the courts weigh in. With the Treasury reluctant to compel a move, it could be some time before it sees its $11.8 billion again.

Treasury suggests GM buy back troubled Ally Financial originally appeared on Autoblog on Wed, 28 Mar 2012 10:30:00 EST. Please see our terms for use of feeds.

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GMAC Insurance test suggests one-in-five drivers would fail driver's test

Jeremy Korzeniewski — Fri, 27 May 2011 16:25:00 EST

Filed under: Etc., Safety

Our roadways are filled with crappy drivers. It's an unfortunate fact that we take our lives into our hands every time we strap on a seatbelt and head out on the open road. But at least we all have passed the most basic test of driving skill, right?

Sadly, according to a recent test carried out by GMAC Insurance, a driver's license may not mean what we think it means. Apparently, one-in-five drivers would fail their driver's test if they had to retake it today. Such simple rules about what to do when approaching a yellow light and how much distance to leave in between the car ahead were answered incorrectly by a shocking three out of four drivers.

After three consecutive years at the bottom of the list, New York drivers managed to move up to 45th, leaving the District of Columbia to earn their spot as the worst drivers in America. Kansas drivers scored the highest. In other us-versus-them news, men managed to score a significant six-percent better than women, and drivers between the ages of 60 and 65 scored the highest.

Check out the complete press release after the break for more interesting tidbits, and feel free to take a simple test yourself at the GMAC Insurance website.

Continue reading GMAC Insurance test suggests one-in-five drivers would fail driver's test

GMAC Insurance test suggests one-in-five drivers would fail driver's test originally appeared on Autoblog on Fri, 27 May 2011 16:25:00 EST. Please see our terms for use of feeds.

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Report: Ally Financial files IPO paperwork

Chris Shunk — Fri, 01 Apr 2011 09:21:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

Ally Financial, formerly GMAC Financial, has filed the paperwork necessary for an Initial Public Offering. The Detroit News reports that the filing will go to the Securities and Exchange Commission for approval before Ally can go public; a process that could take months. The federal government, which owns 74 percent of the lending arm due to its $17.2 billion 2009 bailout, is the only party listed as a stockholder.

The next step for Ally Financial is to go on a tour to entice investors to buy into the financial firm in advance of the SEC's decision. Ally isn't yet close to announcing a price for the stock, nor has the government disclosed the amount of shares it plans to unload, but the DetNews reports that the fed plans to net $5.5 billion from the transaction. The government also owns $5.9 billion in convertible preferred stock.

General Motors still owns 9.9 percent of Ally Financial, but the automaker reportedly won't participate in the sale. The General did announce previously that it sold its preferred stock, though, for $1 billion.

[Source: The Detroit News]

Report: Ally Financial files IPO paperwork originally appeared on Autoblog on Fri, 01 Apr 2011 09:21:00 EST. Please see our terms for use of feeds.

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GM sells of $1 billion in shares of Ally, formerly GMAC

Chris Shunk — Mon, 28 Mar 2011 08:30:00 EST

Filed under: GM, Earnings/Financials

Before General Motors sold its controlling stake of GMAC (now Ally Financial) to Cerberus, the company's captive finance arm was among its largest profit centers. But as the company's debt piled up, it sold off the lion's share of GMAC to keep collectors at bay. But almost as fast as that happened, the auto industry and the global economy took a dive, and GMAC began to reject most every loan The General threw its way.

Fast forward to 2011, and GM has announced the sale of its $1 billion worth of Class A shares of Ally. The sale of the company's outstanding shares will allow the automaker to claim an additional $300 million profit for the first quarter of 2011. Chief financial officer Chris Liddell says that the automaker is "taking another step forward in our strategy to strengthen and simplify the company's balance sheet."

Even with GM's announced preferred stock sale, the automaker will still own 9.9 percent of Ally's common shares. Hit the jump to read over GM's announcement.

[Source: GM]

Continue reading GM sells of $1 billion in shares of Ally, formerly GMAC

GM sells of $1 billion in shares of Ally, formerly GMAC originally appeared on Autoblog on Mon, 28 Mar 2011 08:30:00 EST. Please see our terms for use of feeds.

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Despite agreement with AmeriCredit, GM said to keep deal with Ally

Zach Bowman — Sun, 25 Jul 2010 12:32:00 EST

Filed under: GM, Earnings/Financials

General Motors may be in the process of acquiring AmeriCredit as a step toward securing a captive in-house financing operation, but the company says it will continue to nurture its relationship with Ally. As you may recall, Ally (formerly GMAC) has financed dealer floor plans for years, and GM says that it will continue to rely on its former financing arm for that very reason. While AmeriCredit has been able to weather the rise and fall of consumer confidence with nary a scratch, the company doesn't boast same level of assets as other lenders. Note also that AmeriCredit has next to no experience financing dealer floor plans, and it's easy to see the holes in GM's financing strategy.

Ally seems happy to fill in those bald spots. According to Automotive News, the company provided financing for around a third of all GM vehicles sold at retail during in the first quarter of 2010 and 90 percent of The General's vehicles in inventory. That leaves AmeriCredit to take care of subprime borrowers and leasing duties. Consider the two the dynamic duo of GM financing.

[Source: Automotive News]

Despite agreement with AmeriCredit, GM said to keep deal with Ally originally appeared on Autoblog on Sun, 25 Jul 2010 12:32:00 EST. Please see our terms for use of feeds.

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BREAKING: GM to buy AmeriCredit Corp for $3.5B

Zach Bowman — Thu, 22 Jul 2010 10:56:00 EST

Filed under: GM, Earnings/Financials

General Motors has just announced its intent to acquire AmeriCredit Corp. According to the automaker, the move should give dealers an added finance option when it comes to putting car shoppers into a new vehicle. Since GM and GMAC parted ways back in 2006, buyers looking to purchase a car or truck from The General have faced tougher financing terms than in the past. Supposedly, the new deal with AmeriCredit will provide new opportunities for sub-prime borrowers. The total cost of the deal? A cool $3.5 billion in straight cash.

GM says that putting AmeriCredit under its wing is the next logical step in moving toward an IPO, and most analysts seem to agree. The carmaker had been criticized for not having an in-house financing arm in the past, but the new move should afford the company and its dealership network an added level of financing flexibility. It should also allow GM to return to leasing in a big way. The two companies have been working together extensively in recent months, and GM says that over 4,000 of its dealerships already have relationships with the lender.

The purchase has already been approved by the boards of both GM and AmeriCredit, and pending approval from the lender's stockholders, The General will purchase the finance company for $24.50 per share. As of writing, the company's stock is currently trading at $24.07 - up $4.36 on news of the purchase. Hit the jump for the GM press release. Thanks for the tips, Jeff and Sea Urchin!

[Sources: General Motors, TickerSpy]

Continue reading BREAKING: GM to buy AmeriCredit Corp for $3.5B

BREAKING: GM to buy AmeriCredit Corp for $3.5B originally appeared on Autoblog on Thu, 22 Jul 2010 10:56:00 EST. Please see our terms for use of feeds.

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Chrysler Financial to begin lending once again for Chrysler vehicles?

Zach Bowman — Wed, 21 Jul 2010 17:20:00 EST

Filed under: Car Buying, Chrysler, Earnings/Financials

Chrysler Financial hasn't been doing a whole lot since the domestic automotive implosion of aught-nine. When the Obama Administration's Automotive Task Force found that the lender didn't have the wherewithal to continue making large loans to dealers, GMAC was forced to take over lending duties for Chrysler. Part of that decision was due to the fact that last year, used car values were at one of their lowest points in decades. Since the majority of Chrysler Financial collateral involves used cars and trucks, that was a bit of an issue at the time.

But that was then and this is now. Used vehicle values have rebounded in a big way, and as such, word has it that Chrysler Financial is once again looking into making large-scale loans to dealerships across the country. Word has it that Tom Gilman, Chrysler Fianancial's chief executive officer, has been contacting numerous dealerships in order to get a feel for whether or not there's enough interest for the institution to return to lending, according to Automotive News. Even so, with most dealers now cozy with GMAC, it may be difficult for Chrysler Financial to reestablish itself as the titan it once was.

[Source: Automotive News - sub. req'd.]

Chrysler Financial to begin lending once again for Chrysler vehicles? originally appeared on Autoblog on Wed, 21 Jul 2010 17:20:00 EST. Please see our terms for use of feeds.

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GMAC changing name to Ally in North America

Jonathon Ramsey — Thu, 15 Jul 2010 10:27:00 EST

Filed under: Marketing/Advertising, Earnings/Financials

Come August 23, GMAC's auto lending business will be brought under the Ally Financial banner. While GMAC had already rebranded its other financial divisions, the auto business still went by GMAC. The move continues GMAC's distancing itself from its General Motors mothership, and if we read more into it, this could make it even clearer that Ally has no interest in returning to majority ownership by the automaker (GM still maintains a small stake in the company post-bankruptcy).

In its announcement, GMAC said it would continue to finance GM, Chrysler, Saab and Thor Industries buses and RVs, and that the name change would allow "the company to invest in a brand it owns while continuing to grow" the business of "serving dealers and their customers." As long as those customers aren't subprime, at least.

[Source: GMAC]

GMAC changing name to Ally in North America originally appeared on Autoblog on Thu, 15 Jul 2010 10:27:00 EST. Please see our terms for use of feeds.

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Report: GM decides not to create its own finance unit, will investigate teaming with banks

Jonathon Ramsey — Tue, 13 Jul 2010 08:27:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

Another piece of General Motors' IPO puzzle has been solved: in spite of CEO Ed Whitacre's desire to add a captive finance arm to GM's operations, the company looks set to go without. Acquiring in-house financing always stuck out in Whitacre's aggressive battle plan for getting an IPO done later this year and the hurdles of getting back in with GMAC required untangling enough knots to make King Gordius say, "Skip it..."

Instead, GM will partner with banks that would make the loans to GM customers. Some of those banks are the same ones that GM is working with on a $5 billion credit line, and the idea would be that the banks offering financing would be presented as doing so under the GM banner.

At heart is that in order for GM to unlock its potential, and the potential of the new products it has rolling into showrooms, it needs to be able to finance more customers. Being at the mercy of banks who can choose their own risks means customers leave GM showrooms because they can't get financing or can get a better deal on another car. Also, GMAC won't lend to subprime borrowers. Although they only make up seven percent of GM's target borrowers, in line with other automakers, a seven percent of sales isn't a number you want to leave on the table.

[Source: BusinessWeek | Image: AP/Paul Sakuma/Getty]

Report: GM decides not to create its own finance unit, will investigate teaming with banks originally appeared on Autoblog on Tue, 13 Jul 2010 08:27:00 EST. Please see our terms for use of feeds.

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Dumbest drivers in the country live in what state?

Zach Bowman — Thu, 03 Jun 2010 19:01:00 EST

Filed under: Etc., Government/Legal, Safety

GMAC Insurance just completed its annual survey of driver knowledge, and the results don't look good. Of those questioned, New York drivers proved to know the least about the rules of the road, with 20 percent failing the written exam and 85 percent not knowing basic information like what to do when approaching a yellow light. The trend continued for most of the North East with the region managing the lowest average test score of 74.9 percent.

Meanwhile, the Mid-West took the highest average test score by region with 77.5 percent average. It turns out Kansas drivers are the most knowledgeable of traffic laws. The state's residents managed to pull down an average test score of 82.3 percent. GMAC surveyed a total of 5,000 licensed drivers from all 50 states and Washington, D.C. for its research, and looked into distracted driving issues as well.

GMAC didn't provide average test scores for the entire nation, but we can guess they're nothing to brag about. Our country's approach to driver's education is outdated and underfunded at best, and hand-me-down at worst. Bi-annual testing, behind-the-wheel training (complete with an understanding of vehicle control in emergency situations) and law-enforcement for infractions other than speeding would be a good place to start. It ain't gonna be cheap, but it certainly would be worth it in lives and insurance costs.

[Source: CBS News | Image: New York DMV]

Dumbest drivers in the country live in what state? originally appeared on Autoblog on Thu, 03 Jun 2010 19:01:00 EST. Please see our terms for use of feeds.

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Obvious: Survey says nearly one-in-five motorists "unfit" to drive

Jeremy Korzeniewski — Fri, 28 May 2010 15:58:00 EST

Filed under: Etc., Government/Legal, Safety

How many bad drivers can you spot every day on your drive to work? Five? Ten? All of them? We feel your pain, and apparently the alarming truth is that one-in-five motorists - which, for those interesting in the gory details, equals roughly 38 million Americans - are unfit to drive on our nation's highways.

This data is according to a test administered by GMAC Insurance that asked motorists 20 questions taken straight from your local DMV's written driving test. About 20 percent of currently licensed drivers would have failed the test, and the average score of 76.2 percent is down slightly from that of 2009.

Some interesting factoids: Male drivers scored better than females on both average scores (78.1 percent male versus 74.4 percent female) and failure rates (24 percent female versus 18.1 percent male). New Yorkers ranked dead last (70 percent average score) and Kansas drivers ranked highest (82.3 percent average score). Want to know more? (Perhaps not...). If so, click here for a further breakdown from our friends at TheDetroitBureau.com.

[Source: TheDetroitBureau.com | Image: timsamoff C.C. 2.0]

Obvious: Survey says nearly one-in-five motorists "unfit" to drive originally appeared on Autoblog on Fri, 28 May 2010 15:58:00 EST. Please see our terms for use of feeds.

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GM seeking more subprime buyers?

Chris Shunk — Tue, 18 May 2010 11:01:00 EST

Filed under: Car Buying, Chrysler, GM, Earnings/Financials

In a word, yes. The Detroit News reports that General Motors is looking to find a way to tap into the subprime lending market that accounts for 16 percent of the overall car-buying market. There is, after all, plenty of pressure to sell more vehicles to enhance the company's value leading up to its initial stock sale. But while GM would like to strategically go after subprime borrowers, there is one significant roadblock in the way; Ally Financial. The financing firm, which was GMAC until The General sold off its captive finance arm prior to bankruptcy, apparently isn't willing to endeavor into risky loans. Ally, like The General, is owned in part by the federal government, with government cash in its coffers.

Top GM North America executive Mark Reuss reportedly told the Motor City newspaper that the automaker wants to have more autonomy over whom it lends money to, and it's all about moving more metal. Reuss points out the fact that 20 percent of Honda's new car sales are currently to subprime borrowers, adding "it would sure help my sales, the company's sales in North America, if we were able to get access."

If GM were to wrestle back a controlling interest in Ally, the company that could be most concerned with the result could be Chrysler. The Pentastar also depends upon Ally for vehicle financing, and CEO Sergio Marchionne points out that "if they control the lending practices and the degree of penetration and support that they gave to Chrysler, that would make us very, very concerned."

At this point, Reuss claims that GM hasn't yet asked Ally to expand subprime loans, so there is a chance that the two companies will be able to reach an agreement without GM getting back into the loan business.

[Source: The Detroit News | Image: Mark Ralston/AFP/Getty]

GM seeking more subprime buyers? originally appeared on Autoblog on Tue, 18 May 2010 11:01:00 EST. Please see our terms for use of feeds.

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Report: GM considering getting back into auto-lending game

Jonathon Ramsey — Fri, 14 May 2010 08:01:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

If General Motors CEO Ed Whitacre has a personal soundtrack, perhaps it's anything by the group Attack! Attack! While the world waits for news of GM's first real profits, the company head is staking out a potentially huge acquisition, that being the auto financing arm of Ally Bank, which was once GMAC.

Ever since GM had to walk away from GMAC, dealers have had to rely on outside lenders in order to sell cars. One dealer said, "Getting a customer financed today is the hardest thing, even if they have good numbers," but a GM-owned finance arm could be more proactive with lending, and therefore moving metal and making money.

The report indicates that if Whitacre were looking to acquire Ally, he might only want to deal with the auto finance arm, leaving the other lending branches alone. Still, he'd have to sort out Ally's status as a bank holding company, and that might be too much to swallow. He could also form a partnership with other banks in the meantime, but it will take time to get banks on GM's side in the way GM wants, and Whitacre isn't a man out to waste time; he wants a deal in place by the end of the year before taking the company public.

[Source: Automotive News - Sub. Req'd | Image: William Thomas Cain/Getty Images]

Report: GM considering getting back into auto-lending game originally appeared on Autoblog on Fri, 14 May 2010 08:01:00 EST. Please see our terms for use of feeds.

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Report: Saab pondering tech partnership with Germans, picks GMAC as official financer

Chris Paukert — Mon, 15 Mar 2010 17:32:00 EST

Filed under: Car Buying, Sedan, Wagon, Technology, GM, Saab

2010 Saab 9-3X - Click above for high-res image gallery

While newly emancipated Saab has some fresh product in its near-term pipeline, it's fair to say that the biggest challenge for the Swedish automaker over the long haul will be the development of costly new technologies and platforms. To that end, Spyker CEO Victor Muller has let slip to Automotive News Europe that Saab is actively looking at technology sharing arrangements with other OEMs - and they aren't just looking in former parent General Motors' direction.

More to the point, Muller says that Saab has already been contacted by around a half-dozen OEMS, including "some German brands," although the unnamed Deutsch companies are said to exclude Volkswagen and Audi. Saab presently has production and intellectual property agreements in place with GM to keep fresh product flowing through the rollout of its next-generation 9-3 in 2012, but after that line launches, it could receive parts developed from outside partners, including things like new powertrains, and potentially down the road, platforms.

In other company news, GMAC has been selected as the preferred source of financing for Saab franchises, providing a bit of continuity to the company's dealer base, as GMAC was also a major source of new car financing under GM. You can read the official announcement after the jump and check out our newly expanded gallery of the soon-to-launch 9-3X below.

Gallery: 2010 Saab 9-3X

[Sources: Automotive News - Sub. Req., Saab]

Continue reading Report: Saab pondering tech partnership with Germans, picks GMAC as official financer

Report: Saab pondering tech partnership with Germans, picks GMAC as official financer originally appeared on Autoblog on Mon, 15 Mar 2010 17:32:00 EST. Please see our terms for use of feeds.

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Report: Congressional panel doubts GMAC business case, suggests breakup

Jeremy Korzeniewski — Fri, 12 Mar 2010 13:58:00 EST

Filed under: Government/Legal, Earnings/Financials

"The panel is deeply concerned that Treasury has not required GMAC to lay out a clear path to viability or a strategy for fully repaying taxpayers." This, according to a Congressional Oversight Panel that was created as a watchdog for the U.S. Treasury's Troubled Asset Relief Program (TARP) funds. The fix? Potentially breaking GMAC up into units and merging its auto lending business back into General Motors.

As a refresher, the Treasury invested $17.2 billion in TARP funds into GMAC, after which the financial company lost $8.3 billion on its Residential Capital unit in 2009. For it's part, Treasury has responded to the panel in a statement, saying, "Treasury continues to be a reluctant shareholder and to manage its investment in GMAC in a hands-off commercial manner consistent with the administration's established principles that guide Treasury's management of financial interests in private firms."

And since we've heard from the congressional panel and Treasury, why not from GMAC itself? Again, from a statement as reported to Automotive News: "We appreciate the panel's responsibility to analyze history; however, GMAC's management team is focused on the future. That includes continuing to provide the highest level of service to auto dealers and consumers in support of our auto partners, returning GMAC to a high level of profitability, and repaying the U.S. Treasury."

At this point, there's no clear indication on how Treasury or the congressional panel will proceed. Regardless, this is an issue that we'll be keeping a close eye on in the coming weeks. Stay tuned.

[Source: Automotive News - sub. req'd. | Image: Craig Jones/Getty]

Report: Congressional panel doubts GMAC business case, suggests breakup originally appeared on Autoblog on Fri, 12 Mar 2010 13:58:00 EST. Please see our terms for use of feeds.

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GMAC to post $10B loss after U.S. govt takes the wheel?

Jonathon Ramsey — Fri, 08 Jan 2010 18:01:00 EST

Filed under: Earnings/Financials

No one likes to bandy on with clichés, but in some cases avoiding a cliché is to ignore a long history of facts and experience that brought it into existence. The cliché we speak is the one about hurling good money after bad. After the government hosed down GMAC with another $3 billion, Uncle Sam's stake in GM and Chrysler's official lender is anywhere from 56 percent to 70 percent depending on the kind of shares the government holds.

The money IV, though, hasn't come close to stemming the losses at GMAC - specifically its Residential Capital unit that was a subprime lending fiend not so long ago. The parent company looks to report a $10B loss for 2009 - its largest yearly loss ever - due to a fourth quarter loss of $5B, which also sets a company record for one quarter.

As to the wisdom of combining good money and bad, the government doesn't have a lot of choice: other bailed-out banks' lending practices would make Scrooge say, "Wow, that's stingy," and if GMAC goes under then a lot of GM and Chrysler dealers take fatal hits. Nevertheless, don't expect this year to bring better results: delinquencies will peak next year while home prices bottom out, and the government's subsidies for mortgage-holders will probably end this year. All of that probably equals a prognosis that could come from the Book of Cataclysm: "Let there be pain."

[Source: Business Week | Image: Craig Jones/Getty]

GMAC to post $10B loss after U.S. govt takes the wheel? originally appeared on Autoblog on Fri, 08 Jan 2010 18:01:00 EST. Please see our terms for use of feeds.

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Reports: GMAC close to getting $3B+ cash injection from U.S. government

Chris Shunk — Wed, 30 Dec 2009 13:31:00 EST

Filed under: Government/Legal

When the U.S. government conducted bank stress tests earlier in the year, one of the financial institutes that didn't pass the mid-term exam was GMAC. At the time, the government told GMAC that it would need another $5.6 billion to weather another economic calamity, but the Detroit Free Press reports that the final number will be actually be $3 billion (The Wall Street Journal is reporting $3.5 billion). The money will reportedly come courtesy the $700 billion TARP fund that kept Chrysler, General Motors and many banks afloat during the worst days of the recession. GMAC has already received $12.5 billion from the federal government.

GMAC, which is now 35-percent owned by the federal government, now controls financing for both GM and Chrysler. GMAC spokesperson Gina Proia declined to discuss any cash infusion due to the fact that the government hasn't officially announced anything, but she did add that the financing company "has been conducting a strategic review of its business and evaluating options to address the challenges in its mortgage operation." An official announcement is expected later today or sometime Thursday.

[Sources: Detroit Free Press; The Wall Street Journal]

Reports: GMAC close to getting $3B+ cash injection from U.S. government originally appeared on Autoblog on Wed, 30 Dec 2009 13:31:00 EST. Please see our terms for use of feeds.

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REPORT: Chrysler could lose up to 145 more dealers because they can't get financed

Jonathon Ramsey — Mon, 23 Nov 2009 10:30:00 EST

Filed under: Chrysler, Earnings/Financials

Chrysler's dealers haven't yet entered the portion of the game wherein they can catch a break. As if the dearth of inventory and lack of new vehicles weren't enough, nearly 150 dealers haven't been able to finalize floorplan financing. Since Chrysler Financial has exited that business, GMAC stepped in, but dealers are having a hard time meeting its terms: 85 have been turned down flat, another 60 or so are still working on it.

In some cases GMAC has asked for more collateral; in at least one other case, GMAC is looking for the dealer to alter the lending structure of his mortgages (not floorplan), held by Chrysler Financial. The former Pentastar piggy bank, again accused of trying to wind down its operations, said it "continues to cooperate" with all involved. If the rumored number of dealers does fall, it would take Chrysler's planned closures up to nearly 1,000, after the 789 announced earlier this year.

[Source: Bloomberg | Image: Mark Ralston/Getty]

REPORT: Chrysler could lose up to 145 more dealers because they can't get financed originally appeared on Autoblog on Mon, 23 Nov 2009 10:30:00 EST. Please see our terms for use of feeds.

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REPORT: GMAC likely to get more cash soon from federal government

Chris Shunk — Wed, 28 Oct 2009 10:29:00 EST

Filed under: Government/Legal, GM

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]

REPORT: GMAC likely to get more cash soon from federal government originally appeared on Autoblog on Wed, 28 Oct 2009 10:29:00 EST. Please see our terms for use of feeds.

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