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]