According to a source close to the company, GM execs want to get their hands back into the financing business, and establish their own auto-financing arm so that they can better compete by offering competitive lease and loan deals. The government now owns a 56% stake in GMAC – the former GM finance arm – after the company ran into trouble in the hands of previous majority stake holder, Cerberus Capital Management LP, the former owner of Chrysler.
The argument offered by GM execs is that a GM-owned financing company would be more apt to offer attractive lease and finance deals than an independent company, as said company would be responsible for its own bottom line, while a GM-owned company would be in the position of taking a proverbial bullet for the company.
Though company spokesperson Tom Wilkinson said on Tuesday that it would not be issuing comment, he mentioned that GM currently has attractive financing deals through Ally Financial (the renamed GMAC), and other banks and credit unions.
– By: Stephen Calogera