GMAC gets $6 billion to support auto lending

Posted: Dec 30, 2008
 Email 8 Comments

The U.S. Treasury Department said last night that it will purchase a $5 billion stake in GMAC LLC “as part of a broader program to assist the domestic automotive industry in becoming financially viable.” The move is seen as a move aimed at easing the worst credit crisis since the 1930s.

As a part of the purchase, the government is lending GM another $1 billion to GM so it can participate in a rights offering at GMAC connected to the company’s move to become a bank holding company. The $1 billion will be offered separately of the $13.4 billion.

GMAC, which is co-owned by GM and Cerberus Capital management, lost a total of $7.9 billion over the last five quarters due to the credit crunch. GMAC won approval from the fed to become a bank holding company last week after GM and Cerberus agreed to cut their stake in the company.

Source: Reuters


Share |  Email  Print |

Tags:




Subscribe & Connect

Connect with us on any of our social profiles below.

Subscribe to our e-mail newsletter to receive updates.

  • zermatt

    I really hopes that this works. With the taxpayers dropping billions into GM, Chrysler and GMAC there has to be dramatic results or we will have waisted money that could have been used for other uses.

    What I find to be odd is that our government is not requiring managment changes with this change in status for GMAC.

    Finally, with this infusion of cash will 0% loans be availble soon?

  • Screwed American

    I'm so glad we're paying for these goons mistakes. I will continue to show my support for the bailout by not buying any of their POS product.

  • Pat

    analysts say that management changes during a time like this will be a horrible move… although I really think Bob Nardelli needs to leave

  • zermatt

    What makes the FDIC think that GMAC has the management expertise to run a real bank?

    With regard to Nardelli, I am indifferent on him, but I can think of no reason why Rick Wagoner, with his 8 years of running GM into the ground, should stay on at GM.

  • zermatt

    I really hopes that this works. With the taxpayers dropping billions into GM, Chrysler and GMAC there has to be dramatic results or we will have waisted money that could have been used for other uses.

    What I find to be odd is that our government is not requiring managment changes with this change in status for GMAC.

    Finally, with this infusion of cash will 0% loans be availble soon?

  • Screwed American

    I'm so glad we're paying for these goons mistakes. I will continue to show my support for the bailout by not buying any of their POS product.

  • Pat

    analysts say that management changes during a time like this will be a horrible move… although I really think Bob Nardelli needs to leave

  • zermatt

    What makes the FDIC think that GMAC has the management expertise to run a real bank?

    With regard to Nardelli, I am indifferent on him, but I can think of no reason why Rick Wagoner, with his 8 years of running GM into the ground, should stay on at GM.