Autoblog

Autoblog http://www.autoblog.com Autoblog http://www.blogsmithmedia.com/www.autoblog.com/media/feedlogo.gif Autoblog http://www.autoblog.com en-us Copyright 2009 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[REPORT: Chrysler could lose up to 145 more dealers because they can't get financed]]>http://www.autoblog.com/2009/11/23/report-chrysler-could-lose-up-to-145-more-dealers-because-they/http://www.autoblog.com/2009/11/23/report-chrysler-could-lose-up-to-145-more-dealers-because-they/http://www.autoblog.com/2009/11/23/report-chrysler-could-lose-up-to-145-more-dealers-because-they/#commentsFiled 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.

Read | Permalink | Email this | Comments]]>chryslerchrysler dealerschrysler dealers rejectedchrysler dealershipchrysler financialChryslerDealersChryslerDealershipChryslerDealersRejectedChryslerFinancialfinancialsgmacMon, 23 Nov 2009 10:30:00 EST<![CDATA[REPORT: GMAC likely to get more cash soon from federal government]]>http://www.autoblog.com/2009/10/28/report-gmac-likely-to-get-more-cash-soon-from-federal-governmen/http://www.autoblog.com/2009/10/28/report-gmac-likely-to-get-more-cash-soon-from-federal-governmen/http://www.autoblog.com/2009/10/28/report-gmac-likely-to-get-more-cash-soon-from-federal-governmen/#commentsFiled 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.

Read | Permalink | Email this | Comments]]>bank holding companyBankHoldingCompanygeneral motorsGeneralMotorsgmgmacgovernment loansGovernmentLoansWed, 28 Oct 2009 10:29:00 EST<![CDATA[Chrysler to resume leasing vehicles soon?]]>http://www.autoblog.com/2009/09/11/chrysler-to-resume-leasing-vehicles-soon/http://www.autoblog.com/2009/09/11/chrysler-to-resume-leasing-vehicles-soon/http://www.autoblog.com/2009/09/11/chrysler-to-resume-leasing-vehicles-soon/#commentsFiled under: Car Buying, Chrysler, Dodge, Jeep, Earnings/Financials

2009 Dodge Ram - Click above for high-res image gallery

In late July 2008, Chrysler announced that it would stop leasing vehicles effective August 1. The news helped exasperate the decline of Chrysler group vehicle sales while giving customers fewer options for getting into a new vehicle. After leasing was discontinued, Chrysler's market share dropped from 11.3% to 9.2%. The decline came in part because of Chrysler's very public bankruptcy proceedings and its lackluster product lineup, but there is little doubt that the end of vehicle leasing was also a major contributor to the automaker's precipitous decline.

In an effort to get back on the right track, Automotive News is reporting that dealer sources say leasing could return to the Pentastar as soon as September 18. Chrysler is reportedly waiting until after next Tuesday to make an announcement so it can look over residual value data from the Automotive Lease Guide before making a final decision. Chrysler, which uses GMAC as its finance arm, could follow General Motors' lead and offer leasing only on select vehicles. AN estimates that the Dodge Ram, Journey, Nitro and Grand Caravan, the Jeep Grand Cherokee and the Chrysler Town & Country could be among the vehicles ready for lease duty.

Gallery: 2009 Dodge Ram

[Source: Automotive News]

Chrysler to resume leasing vehicles soon? originally appeared on Autoblog on Fri, 11 Sep 2009 14:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>auto leaseAutoLeasecar leaseCarLeasechrysler leaseChryslerLeasedodge grand caravandodge journeydodge leasedodge ramDodgeGrandCaravanDodgeJourneyDodgeLeaseDodgeRamgmacjeep grand cherokeejeep leaseJeepGrandCherokeeJeepLeaseleaseleasingpentastarvehicle leasingVehicleLeasingFri, 11 Sep 2009 14:28:00 EST<![CDATA[REPORT: GM to resume leasing luxury vehicles on Aug. 1]]>http://www.autoblog.com/2009/07/29/report-gm-to-resume-leasing-vehicles-on-aug-1/http://www.autoblog.com/2009/07/29/report-gm-to-resume-leasing-vehicles-on-aug-1/http://www.autoblog.com/2009/07/29/report-gm-to-resume-leasing-vehicles-on-aug-1/#commentsFiled under: Car Buying, Chrysler, GM

Cadillac CTS - Click above for a high-res image gallery

Just in time for the weekend, rumor has it that General Motors and GMAC plan to crank up the leasing machine again on August 1. When GM stopped the practice last year, leases made up 20% of its business, but was costing the General money hand-over-fist. Dealers have continued to lease on their own, through outside banks, but the volume of cars leaving the lot as lease deals is "negligible".

The most either company would say on-the-record is that they are looking at ways to get back into it. GM is said to have spoken to several banks - not just GMAC - to gain a solid position. GMAC, now a bank holding company, is also one of Chrysler's partners; with credit slowly opening up and resale values slowly rising, it's not a bad time for the company to take steps toward leasing again.

For the moment, the only car mentioned for lease availability is the Cadillac CTS, as the luxury segment is traditionally the most lease-heavy.

Gallery: 2008 Cadillac CTS - action shots

[Source: Wall Street Journal]

REPORT: GM to resume leasing luxury vehicles on Aug. 1 originally appeared on Autoblog on Wed, 29 Jul 2009 17:02:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>car buyingCarBuyingchryslergeneral motorsGeneralMotorsgmgmacleaseleasingWed, 29 Jul 2009 17:02:00 EST<![CDATA[Chrysler announces "Double CA$H For Your Old Car" promotion]]>http://www.autoblog.com/2009/07/22/chrysler-announces-double-ca-h-for-your-old-car-promotion/http://www.autoblog.com/2009/07/22/chrysler-announces-double-ca-h-for-your-old-car-promotion/http://www.autoblog.com/2009/07/22/chrysler-announces-double-ca-h-for-your-old-car-promotion/#commentsFiled under: Car Buying, Marketing/Advertising, Chrysler

2009 Dodge Journey R/T - Click above for high-res image gallery

With Cash for Clunkers slated to go live on July 23, every automaker appears primed to grab a piece of the action. Chrysler is no different, and its new "Double CA$H For Your Old Car" incentive program promises up to match the government's $4,500 "Clunkers" incentive for some vehicles.

Taking $9,000 off the MSRP of the vehicle of your choosing sounds fantastic, but of course, the program isn't that easy. First, obviously, you'd need a vehicle that is eligible for the maximum $4,500 allowance under the government's Cash for Clunkers initiative. Then, you'd need to find a Chrysler, Dodge, or Jeep vehicle that has the maximum $4,500 in incentives. If you can fit both of those criteria, you will receive $9,000 off MSRP. Chrysler is also offering 0% financing for up to 72 months through GMAC as an alternative to cash incentives.

Chrysler's "Double CA$H For Your Old Car" program runs from July 23-August 31. Hit the jump to view Chrysler's press release. Unfortunately, the release doesn't contain any information pertaining to which vehicles are eligible for the full incentive of $4,500.

[Source: Chrysler]

Continue reading Chrysler announces "Double CA$H For Your Old Car" promotion

Chrysler announces "Double CA$H For Your Old Car" promotion originally appeared on Autoblog on Wed, 22 Jul 2009 10:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>0 financing0Financingauto financingAutoFinancingcar financingCarFinancingcash for clunkersCashForClunkerschryslerdodgedodge journeyDodgeJourneygmacincentivesWed, 22 Jul 2009 10:30:00 EST<![CDATA[SURVEY: Does your state have the smartest drivers... or the dumbest?]]>http://www.autoblog.com/2009/06/05/survey-does-your-state-have-the-smartest-drivers-or-the-dumb/http://www.autoblog.com/2009/06/05/survey-does-your-state-have-the-smartest-drivers-or-the-dumb/http://www.autoblog.com/2009/06/05/survey-does-your-state-have-the-smartest-drivers-or-the-dumb/#commentsFiled under: Government/Legal, Safety, Lifestyle

Raise your hand if you think your home state has the worst drivers in America. Now, lower your hands if you don't happen to live in either New York or New Jersey. Of course, that doesn't necessarily mean that the average driver in your particular state is all that great, regardless of what city you choose to call home. According to this year's GMAC Insurance National Drivers Test, an alarming 20.1% of licensed Americans would not pass a written drivers test exam if taken today.

For what it's worth, those people who couldn't manage to pass the basic driving test amount to roughly 41 million drivers that are currently piloting two-ton weapons of mass destruction on American roads. Before you get all up in arms over this news, consider taking the test yourself. Even if you pass, you might pick up on a few valuable reminders that may have slipped your mind at some point since you last took the test, probably at just 16 years of age or so.

Oh, the states that have the smartest drivers? That would be Idaho and Wisconsin, which tied for first place with an average test score of 80.6 percent.

[Source: GMAC Insurance | Photo: fireflythegreat - cc 2.0]

Continue reading SURVEY: Does your state have the smartest drivers... or the dumbest?

SURVEY: Does your state have the smartest drivers... or the dumbest? originally appeared on Autoblog on Fri, 05 Jun 2009 16:57:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>driving examdriving exam faildriving testdriving test failDrivingExamDrivingExamFailDrivingTestDrivingTestFailfailed driving testFailedDrivingTestgmacnew jersey driversnew york driversNewJerseyDriversNewYorkDriverswritten driving examwritten driving testWrittenDrivingExamWrittenDrivingTestFri, 05 Jun 2009 16:57:00 EST<![CDATA[REPORT: GMAC gets another $7.5B from U.S gov't.]]>http://www.autoblog.com/2009/05/22/report-gmac-gets-another-7-5b-from-u-s-govt/http://www.autoblog.com/2009/05/22/report-gmac-gets-another-7-5b-from-u-s-govt/http://www.autoblog.com/2009/05/22/report-gmac-gets-another-7-5b-from-u-s-govt/#commentsFiled under: Government/Legal, Chrysler, GM, GMC, Earnings/Financials

According to The Detroit Free Press, the U.S. Treasury has dumped another $7.5 billion into GMAC's coffers just two weeks after the bank was told by federal regulators that it needed billions in order to survive. In another government-backed boost, GMAC is now allowed to issue FDIC-insured debt. Both actions are reportedly designed to help restore faith in the damaged U.S. credit markets.

Founded in 1919, and traditionally a longtime lender to General Motors dealers and customers, the government recently ordered GMAC to extend the same lending offers to Chrysler dealers and their customers. "This new arrangement with GMAC will help provide a reliable source of financing to both auto dealers and customers seeking to buy cars," said Treasury Secretary Timothy Geithner. Approximately $4 billion of the new infusion will support go to support dealer and retail loans for the Chrysler brand, while the remaining $3.5 billion is designed help GMAC address its capital needs in order to survive.

[Source: The Detroit Free Press]

REPORT: GMAC gets another $7.5B from U.S gov't. originally appeared on Autoblog on Fri, 22 May 2009 18:27:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>billionsChryslerGMACinfusionlendingTimothy GeithnerTimothyGeithnerU.S. TreasuryU.s.TreasuryFri, 22 May 2009 18:27:00 EST<![CDATA[GMAC resumes subprime lending]]>http://www.autoblog.com/2009/04/02/gmac-resumes-subprime-lending/http://www.autoblog.com/2009/04/02/gmac-resumes-subprime-lending/http://www.autoblog.com/2009/04/02/gmac-resumes-subprime-lending/#commentsFiled under: Car Buying, GM, Earnings/Financials

GMAC has loosened the purse strings, with General Motors' finance arm allocating $6 billion for auto loans for the next 60 days. The 60 day mark is critical to GM, as it is the government's drop-dead date to satisfy Auto Task Force viability requirements. The cash infusion will help struggling dealers with dried up credit channels, but it will also be used to finance cars and trucks to people with credit scores under 620. The under 620 crowd is referred to as subprime, a term that is now synonymous with the words "bailout" and "recession."

Back in October, GMAC restricted lending to customers with scores over 700, and when the U.S. government provided a $6 billion in loans, the minimum score was lowered to 620. GMAC insists that the under 620 score would be approved sparingly, and buyers would still be required to qualify for financing. NADA chairman John McEleney says that the lowered credit score minimum could result in the ability to help 30-35% more Americans get into a new car or truck. And while overplaying the subprime card can lead to more trouble, at this point, the General clearly has to do something to get metal moving again.

[Source: Automotive News subs req'd | Image: Joe Raedle/Getty]

GMAC resumes subprime lending originally appeared on Autoblog on Thu, 02 Apr 2009 16:20:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>620 credit score620CreditScore700 credit score700CreditScorefinancingGMgmaclendingsub primesubprimevehicle financingVehicleFinancingThu, 02 Apr 2009 16:20:00 EST<![CDATA[GMAC CEO earned $11.6 million last year]]>http://www.autoblog.com/2009/03/02/gmac-ceo-earned-11-6-million-last-year/http://www.autoblog.com/2009/03/02/gmac-ceo-earned-11-6-million-last-year/http://www.autoblog.com/2009/03/02/gmac-ceo-earned-11-6-million-last-year/#commentsFiled under: GM

The recent string of government bailouts has placed a 50,000-watt spotlight on executive pay. Executives from Detroit automakers have already cut their pay to show the public and their own workforces that they're sacrificing for the greater good. There hasn't been much focus, however, on finance arm executives, though there likely will be after Automotive News learned that GMAC CEO Alvaro de Molina was paid $11.6 million in 2008. Molina's 2008 windfall comes one year after he pulled in nearly $5 million in 2007; an amazing amount of money considering he started at GMAC in September of that year.

The breakdown of what Molina earned in 2008 is actually $1.2 million in salary, $5.81 million in stocks and $4.8 million of "other" compensation, offset by stock options that pulled the grand total down by $194,000. Included in the $4.8 million "other" compensation is $2.26 million in usage of a company jet, a privilege that has since been revoked.

If your stomach is turning at the thought of a finance CEO making $11.6 million when his company is losing billions on its mortgage and automotive finance operations, you're not alone. We're guessing that Molina's 2009 will be significantly less lucrative than 2008, but likely still more than most of us feel any CEO deserves.

[Source: Automotive News subs req'd]

GMAC CEO earned $11.6 million last year originally appeared on Autoblog on Mon, 02 Mar 2009 10:27:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>alvaro de molinaAlvaroDeMolinaCerberusGMGMACMon, 02 Mar 2009 10:27:00 EST<![CDATA[Wanted: Lender for 1,000 GM vans]]>http://www.autoblog.com/2009/02/24/wanted-lender-for-1-000-gm-vans/http://www.autoblog.com/2009/02/24/wanted-lender-for-1-000-gm-vans/http://www.autoblog.com/2009/02/24/wanted-lender-for-1-000-gm-vans/#commentsFiled under: Car Buying, Etc., Work, GM, Earnings/Financials

Dave Capps is in the business of renting vans. In order for him to stay in that business, he needs to buy new vans - 1,000 of them, to be precise. And although he's been a GMAC customer for 20 years, remains in good standing, and gets much of his current inventory financing from GMAC, he can't get the credit he needs to buy the new vans. So Capps rented a billboard in Dallas to be an appeal to anyone willing to lend him the money.

GMAC hasn't discussed why it won't give Capps the necessary credit. According to Capps, "GMAC said that they don't do vehicle loans and their new GMAC bank is prohibited from loaning money for vehicles. I have to take their word that they can't do that." We're not sure how that conversation went down, but if Capps really was told that newly minted bank holding company GMAC can't loan money for vehicles, well, we have a lot of questions.

After GMAC received a $5 billion loan from the government, it said it would open up dealer financing. A short time later, dealers said they didn't notice any opening and kept getting their credit applications rejected. While Capps isn't a dealer, he does share the need to purchase GM products to keep his business going. We don't know what GMAC's reasons are for keeping the vault locked, but we hope they're pretty good if it means turning down a guy who wants a thousand vans. Hat tip to Rick!

[Source: DFW Stangs]

Wanted: Lender for 1,000 GM vans originally appeared on Autoblog on Tue, 24 Feb 2009 07:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>car buyingCarBuyingcommercial trucksCommercialTrucksetcfinancialsgmgmaclendingvanvansTue, 24 Feb 2009 07:28:00 EST<![CDATA[Cerberus may cut 10% of its workforce]]>http://www.autoblog.com/2009/01/22/cerberus-may-cut-10-of-workforce/http://www.autoblog.com/2009/01/22/cerberus-may-cut-10-of-workforce/http://www.autoblog.com/2009/01/22/cerberus-may-cut-10-of-workforce/#commentsFiled under: Trends, Hirings/Firings/Layoffs, Chrysler, Earnings/Financials

That Chrysler continues to struggle isn't exactly news. As a whole, the auto industry is tanking and cars just aren't moving off dealer lots. Chrysler initially responded by offering buyouts to its entire workforce, and 25% off all its salaried workers took the company up on the offer. Earlier this week, we learned that the ailing Auburn Hills empire will get cozy with Italian automaker Fiat. What we haven't heard as much about, however, is the health of Chrysler's parent company, Cerberus Capital Management.

Like many investment institutions, the three-headed dog is looking to save money, and some of that cash may come at the expense of its workforce. Cerberus has 275 workers around the globe, and up to 10% of those employees will likely face the axe. The private equity firm has struggled with Chrysler, GMAC and Chrysler Financial, but anyone watching the stock market knows the rest of the business world hasn't really fared much better. Blackstone, which also bid on Chrysler back in 2007, is cutting 5% of its workers, and the Carlyle group 10%. The Cerberus job cuts are only a fraction of the bloodletting Chrysler has had to endure over the past two years, but at least it shows that the Pentastar isn't the only one making the sacrifice.

[Source: Automotive News subs req'd]

Cerberus may cut 10% of its workforce originally appeared on Autoblog on Thu, 22 Jan 2009 19:29:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>auburn hillsAuburnHillscapital managementCapitalManagementcerberuschryslerChrysler financialChryslerFinancialGMACjob lossesJobLossesllcventure capitalVentureCapitalThu, 22 Jan 2009 19:29:00 EST<![CDATA[REPORT: Dealers say bailout hasn't made for more GMAC loans]]>http://www.autoblog.com/2009/01/20/report-dealers-say-bailout-hasnt-made-for-more-gmac-loans/http://www.autoblog.com/2009/01/20/report-dealers-say-bailout-hasnt-made-for-more-gmac-loans/http://www.autoblog.com/2009/01/20/report-dealers-say-bailout-hasnt-made-for-more-gmac-loans/#commentsFiled under: Car Buying, Government/Legal, GM, Earnings/Financials

GM dealership handshake

Show me the money. With apologies to Cuba Gooding Jr., that is exactly what many General Motors dealers are saying to GMAC Financial Services.

Despite being given $5 billion from the U.S. Government last month, GMAC apparently hasn't loosened its purse strings enough for dealers' likings. Some, in fact, are reporting that GMAC keeps rejecting their credit applications. This is somewhat surprising because GMAC previously agreed to lower the necessary minimum credit score ratings from 700 to 621 for new vehicle loans, so presumably more requests should be going through. Dealers are frustrated and although some preferred dealers have seen loan rate reductions, others are saying that GMAC is still as much as 1.5 percent higher than the competition.

In response to this problem, dealers have come up with a wish list of sorts. They are asking that GMAC return to leasing, approve some sub-prime loans and cut interest rates for loans to dealers to help finance their inventory. Also of concern is the fact that customers are increasingly upside down on their trade-ins. As a direct result, these consumers are having trouble getting approved because GMAC requires bigger down payments than it once did.

[Source: Automotive News, sub. req.]

REPORT: Dealers say bailout hasn't made for more GMAC loans originally appeared on Autoblog on Tue, 20 Jan 2009 07:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bailoutdealer relationsDealerRelationsdealershipdealershipsdetroit 3detroit 3 bailoutdetroit threeDetroit3Detroit3BailoutDetroitThreefinancinggeneral motorsGeneralMotorsGMgm bailoutgmacGmBailoutTue, 20 Jan 2009 07:28:00 EST<![CDATA[Does Washington's GMAC bailout hurt Ford?]]>http://www.autoblog.com/2009/01/04/does-washingtons-gmac-bailout-hurt-ford/http://www.autoblog.com/2009/01/04/does-washingtons-gmac-bailout-hurt-ford/http://www.autoblog.com/2009/01/04/does-washingtons-gmac-bailout-hurt-ford/#commentsFiled under: Car Buying, Government/Legal, Earnings/Financials

The Wall Street Journal puts forth the case that the government's $5 billion lifeline to GMAC has given GMAC a competitive advantage compared to its rivals. After the taxpayer cash was received, GMAC dropped the required credit score to get a loan and began offering 0% financing on several models, and rates from about 1% to 6% on a host of others. While doing so, it admitted that "without this [loan] . . . we would not be able to do this today."

The Journal cries foul, saying that because GMAC is essentially doing this with -- or at least, because of -- government money, "the feds have now put the muscle of the state behind one company's products." The Journal also considers that the government might do what it can to make sure the horses it bet on win the race, saying "the Washington temptation will be to take other steps to help the two companies gain market share at the expense of their private competitors."

As to the issue of granting the loan to GMAC at all, the government didn't have much choice unless it wanted its previous investment in GM to potentially get flushed by a GMAC bankruptcy. As to 0% fiancing, it's being offered on SUVs and Saabs, none of which are making the cash register overheat. A quick comparison between financing in Southern California through GMAC or Ford Credit found similar rates on other cars: the 2009 Malibu gets 4.9% APR, the same as the 2009 Ford Taurus SEL AWD.

Will the government try to otherwise help GM and Chrysler (beyond pushing more money their way)? The airlines got $15 billion after 9/11, yet would anyone accuse the government of otherwise aiding the industry? As to intervention in the free market... well, when was the last time the market was truly free? And Does GMAC's ability to offer the new incentives give it a competitive advantage over the other companies? It only lasted until January 5th, and some GM dealers did say they were moving metal -- but if the benefit really was that lopsided, we're sure those competitors will let us know about it soon enough.

[Source: Wall Street Journal]

Continue reading Does Washington's GMAC bailout hurt Ford?

Does Washington's GMAC bailout hurt Ford? originally appeared on Autoblog on Sun, 04 Jan 2009 19:32:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>auto industry bailoutAutoIndustryBailoutbank bailoutBankBailoutcar buyingCarBuyingfinancialfinancialsfinancingford creditFordCreditgmacgmac loanGmacLoangovernmentwall street journalWallStreetJournalSun, 04 Jan 2009 19:32:00 EST<![CDATA[Deadline passes without word on critical GMAC bond-exchange vote]]>http://www.autoblog.com/2008/12/29/deadline-passes-without-word-on-critical-gmac-bond-exchange-vote/http://www.autoblog.com/2008/12/29/deadline-passes-without-word-on-critical-gmac-bond-exchange-vote/http://www.autoblog.com/2008/12/29/deadline-passes-without-word-on-critical-gmac-bond-exchange-vote/#commentsFiled under: Government/Legal, GM, Earnings/Financials

GMAC, General Motors' finance arm, was granted bank holding status, but there is still no word on whether the bond buyback was successful. The deadline for GMAC to have converted enough of its bonds - said to be 75 percent - into $28 billion in liquidity was on Friday, December 26, at 11:59 p.m. In return for bondholders converting their bonds to those of lesser value, they would receive a higher dividend.

Two weeks ago, GMAC said it found a slew of new bondholders, but didn't say whether the new participants would put it above the threshold. Now more than two days past the deadline, GMAC has only said "We have not yet issued final results but intend to in the near term." This kind of silence usually means that things didn't go as planned, but other plans are afoot. While it's not impossible, we'd be shocked if GM had fulfilled The Fed's requirements by the deadline and chose to remain quiet about it.

After all, success for GMAC means success for GM. But bankruptcy for GMAC - which could happen without access to TARP funds - could mean something very close to doom for a lot of dealers and for GM. Our guess is that GMAC and The Fed are trying to figure out the best way forward, because it is certain that the government doesn't want to see its $17.4 billion dollar investment go bust because GM lost on a side bet less than a month later.

[Source: New York Times]

Deadline passes without word on critical GMAC bond-exchange vote originally appeared on Autoblog on Mon, 29 Dec 2008 13:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>auto bailoutAutoBailoutbank holding companyBankHoldingCompanybridge loanBridgeLoanearningsfinancialgmgmactarp fundtarpfundMon, 29 Dec 2008 13:28:00 EST<![CDATA[Fed grants GMAC bank holding status]]>http://www.autoblog.com/2008/12/24/the-fed-grants-gmac-given-bank-holding-status/http://www.autoblog.com/2008/12/24/the-fed-grants-gmac-given-bank-holding-status/http://www.autoblog.com/2008/12/24/the-fed-grants-gmac-given-bank-holding-status/#commentsFiled under: Government/Legal, GM, Earnings/Financials

GMAC - and ergo General Motors - just got another Christmas present: the Federal Reserve has granted GMAC bank holding status. GMAC has billions of dollars of bonds coming due over the next 12 months, but doesn't have the liquidity to cover the obligations. As of last week, the financing company was in the midst of a bond buyback effort in order to raise enough money to qualify for bank holding status. Now that it's been granted, GMAC can tap the Troubled Asset Relief Fund intended for financial institutions, pay its debts and (probably) avoid bankruptcy.

It isn't clear, however, whether or not GMAC actually raised enough money through the bond buyback. The Fed said "emergency conditions" justified its actions, which makes us think the Fed just said "Here, take it." Looked at from a dealer perspective, it makes sense: if GMAC had gone under, one dealer estimated that it would have taken 30-40% of GM dealers down with it, and that could imperil GM itself. It wouldn't make much sense to let that happen when the government just loaned GM a bunch of money to stay in business.

And while GM is still a long, long way from getting the kind of money that any number of banks have, it's still beginning to add up. As a result of the new status, both GM and Cerberus are required to lower their stakes in GMAC. Cerberus has been told to lower its share to 33%, down from 51%; GM has said it will go below 10%. As for Cerberus' other headache, Chrysler Financial, it has said that if dealers don't stop making a run on its funds, it will cease financing for dealer inventories.

[Source: Yahoo!]

Fed grants GMAC bank holding status originally appeared on Autoblog on Wed, 24 Dec 2008 19:57:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>auto bailoutAutoBailoutcerberuschrysler financialChryslerFinancialearningsfinancialsfinancinggmgmactarpwall street bailoutWallStreetBailoutWed, 24 Dec 2008 19:57:00 EST<![CDATA[GMAC rushes to conclude bond buyback and avoid bankruptcy]]>http://www.autoblog.com/2008/12/16/gmac-rushes-to-conclude-bond-buyback-and-avoid-bankruptcy/http://www.autoblog.com/2008/12/16/gmac-rushes-to-conclude-bond-buyback-and-avoid-bankruptcy/http://www.autoblog.com/2008/12/16/gmac-rushes-to-conclude-bond-buyback-and-avoid-bankruptcy/#commentsFiled under: Government/Legal, GM, Earnings/Financials

GM doesn't just have its eye on auto bailout funds -- its GMAC division (of which it owns 49%) is looking for cash from among the $700 billion pledged in the Wall Street bailout. Through the end of next year, GMAC has roughly $12 billion in bonds maturing. But to have any chance at getting Wall Street funds to address those maturing bonds, GMAC wants to become a bank holding company. And to do that, it must raise $30 billion, with $2 billion of that tapped from new sources.

GMAC is looking for 75% of its bondholders to participate in a bond buyback, whereby a bondholder would return bonds worth $1,000 and get about $800 worth of bonds with a higher dividend in return. If it gets participation from 75% of it's bondholders, that will give it $28.5 billion, which it can add to $750 million GMAC says has been pledged by shareholders as part of the $2 billion requirement. That's not quite $30 billion, but closer is better than nothing.

The problem is that, for the moment, GMAC has only 25% participation. GMAC said it had a fresh round of bondholders willing to swap, but didn't make it clear whether that would get it to 75%. If it doesn't get the financing to become a bank holding company, GMAC would likely need to declare bankruptcy. And if that happens? Well, GMAC provides inventory financing for 80% of GM vehicles worldwide. Without that source of financing, said Martin NeSmith,"There's so many dealers on the edge, if GMAC goes out of business 30 to 40 percent of dealers won't be able to get financing from anywhere else." And that spells even more trouble -- and bankruptcies -- for everyone.

[Source: Automotive News - Sub. Req.]

GMAC rushes to conclude bond buyback and avoid bankruptcy originally appeared on Autoblog on Tue, 16 Dec 2008 09:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>auto bailoutAutoBailoutcerberusfinancinggmgmacwall street bailoutWallStreetBailoutTue, 16 Dec 2008 09:00:00 EST<![CDATA[GM to dealers: There's a bonus in it for you if you don't lend them our money]]>http://www.autoblog.com/2008/10/16/gm-to-dealers-theres-a-bonus-in-it-for-you-if-you-dont-lend-t/http://www.autoblog.com/2008/10/16/gm-to-dealers-theres-a-bonus-in-it-for-you-if-you-dont-lend-t/http://www.autoblog.com/2008/10/16/gm-to-dealers-theres-a-bonus-in-it-for-you-if-you-dont-lend-t/#commentsFiled under: Car Buying, Etc., GM

General Motors is telling its dealers that there's a shiny nickel or two in it for them if they can sell cars without getting the GMAC finance arm involved. For every sale closed with outside financing, salespeople and managers will each receive $100, with an additional $50 going to someone the dealer designates. GMAC has already cracked down on borrowers with FICO scores below 700, and this looks like another move to discourage putting GM on the hook for risky loans; let someone else take that chance, the automaker seems to be saying to its dealers. Not all dealerships are happy with the plan, but GM and Cerberus Capital, which owns 49 percent of GMAC, must take steps to reduce potential losses. We can imagine that GM might lose some business to the newly tightened lending criteria, though there are plenty of third party loans out there, many even halfway reputable.

[Source: Automotive News - Sub. Req. | Photo: Justin Sullivan/Getty]

GM to dealers: There's a bonus in it for you if you don't lend them our money originally appeared on Autoblog on Thu, 16 Oct 2008 17:31:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>gm lendinggm loangmacgmac subprime credit exposuregmacfinancialgmacsubprimecreditexposureGmLendingGmLoanThu, 16 Oct 2008 17:31:00 EST<![CDATA[GM launches new campaign to ease credit worries]]>http://www.autoblog.com/2008/10/16/gm-launches-new-campaign-to-ease-credit-worries/http://www.autoblog.com/2008/10/16/gm-launches-new-campaign-to-ease-credit-worries/http://www.autoblog.com/2008/10/16/gm-launches-new-campaign-to-ease-credit-worries/#commentsFiled under: Car Buying, Marketing/Advertising, GM, GMC, Earnings/Financials

After announcing earlier this week that GMAC would only finance customers who hold credit scores higher than 700, General Motors has decided it would be prudent to reassure consumers that they are still in the business of securing loans and selling vehicles. Starting Friday, GM will launch a "Financing That Fits" campaign on a national level. Through advertising on television, newspaper, radio, and the Internet, GM will promote dealer financing with GMAC Financial Services and, for the first time, with other lenders. To further restore consumer confidence, the ads are also designed to promote the experience and expertise of the dealership professionals who work in finance and insurance. The economy has taken a serious toll on GM's showroom traffic over the past few weeks, and the announcement Monday of stricter lending policies dried up business even further. The automaker is hopeful that its new ad campaign, and cash-back deals of up to $6,000 on every 2008 vehicle left in stock, will bring them back in.

[Source: Automotive News, subs. req'd]

GM launches new campaign to ease credit worries originally appeared on Autoblog on Thu, 16 Oct 2008 10:31:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>advertisingcampaignCreditFinancingFinancing that fitsFinancingThatFitsGeneral MotorsGeneralMotorsGMGMAClendingloanThu, 16 Oct 2008 10:31:00 EST<![CDATA[GMAC limits loans to buyers with 700+ FICO rating]]>http://www.autoblog.com/2008/10/14/gmac-limits-loans-to-buyers-with-700-fico-rating/http://www.autoblog.com/2008/10/14/gmac-limits-loans-to-buyers-with-700-fico-rating/http://www.autoblog.com/2008/10/14/gmac-limits-loans-to-buyers-with-700-fico-rating/#commentsFiled under: Car Buying, GM

If you're in the market for a new car, you'd better get your credit score in order first. Auto lending units are looking for top tier customers right now, and GM's captive credit arm is going so far as to mandate a FICO rating of 700 or higher. GMAC is requiring this measure in response to the instability in the global capital and credit markets. The move is likely to cost GM some sales, but according to credit information services company Experian, 74.3% of all auto loans went to consumers with a credit score of over 700. That number is up from the 71% average of 2007, and the number is likely to increase again next year as a result of our country's current economic calamity.

Mandating near perfect credit may sound like one of the best possible ways to ensure GM will see even lower sales totals at the end of October, but that's likely the only way GMAC can get loans from banks. The question isn't whether GM will be the only automaker to look for FICO ratings of 700+, it's whether any other automaker won't follow suit.

[Source: Automotive News - Sub. Req.]

GMAC limits loans to buyers with 700+ FICO rating originally appeared on Autoblog on Tue, 14 Oct 2008 08:32:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>credit scoresCreditScoresFICO scorefico score 700FicoScoreFicoScore700GMGMACTue, 14 Oct 2008 08:32:00 EST<![CDATA[GM/Cerberus talks over full ownership of GMAC]]>http://www.autoblog.com/2008/10/12/gm-cerberus-talks-over-full-ownership-of-gmac/http://www.autoblog.com/2008/10/12/gm-cerberus-talks-over-full-ownership-of-gmac/http://www.autoblog.com/2008/10/12/gm-cerberus-talks-over-full-ownership-of-gmac/#commentsFiled under: Chrysler, GM, Earnings/Financials

It's been a crazy few days as news broke that Chrysler and General Motors have been in talks to combine operations. It turns out that there's a pretty significant back-story to these proceedings, and it involves Cerberus Capital Management's possible desire to shed its car-building operations and acquire the rest of GMAC, of which it already holds a controlling stake of 51%, with GM holding holding the other 49%. According to reports, Cerberus would like to combine Chrysler Financial with GMAC, which would allow it to merge the offices of the two financial institutions and reduce costs. All right, that might make some sense, but what about merging the two automakers? That's the part that seems so confusing to analysts and us meager bloggers. Somehow, we feel certain that there's more to this story, which we'll be hearing about for some time.

[Source: The Detroit News]

GM/Cerberus talks over full ownership of GMAC originally appeared on Autoblog on Sun, 12 Oct 2008 18:31:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>cerberuscerberus capital managementCerberusCapitalManagementchryslerchrysler financialChryslerFinancialgmgmacSun, 12 Oct 2008 18:31:00 EST