It’s no secret that GM was hit extremely hard by the economy, so hard in fact that they had to put a halt on all of their leases.

That halt may soon be over as the Wall Street Journal reports that GM is gearing up to begin leasing cars again as early as next month. This would probably be a smart business decision for GM considering the economy is finally starting to stabalize (knock on wood) and the fact that leases made up 20% of GM’s revenue last year.

Further reports suggest thatGM will be looking for other financial institues to help with leasing rather than GMAC.

Read (WSJ)

Tags: economy, GM, GMAC, leasing, recession, report

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Yesterday, we had posted that General Motors finally got approval for the transfer of assets to the “New” GM. And while many approved and disapproved that piece of news, GMAC issues a statement of their own regarding this development.

In conjunction with the closing of the sale, the contracts GM has with GMAC will be transferred to the new GM entity. GMAC is pleased to conduct its business operations with the new GM entity and to be part of the solution to stabilize and strengthen the U.S. auto industry.

Again this is bound draw some issues. What about the debts and liabilities? What fate does befall them? Technically, we have been talking about the assets or the so-called good sides of the deal. What about the other pieces of the GM puzzle that are totally clueless to date?

Well you can be assured that GM will be in the headlines once again from hereon. There are still some loose ends to cover.

(Source) Press

Tags: assets, auto industry, business operations, conjunction, contracts, court bankruptcy, debts, General Motors, GM, GMAC, headlines, liabilities, loose ends, puzzle, u s auto

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GMAC, the former division from GM, is getting another shot in the arm with the injection of $7.5 billion in exchange for shares from the company. The move is expected to be good news for all Chrysler and dealers, an issue that has been plaguing the headlines due to the car manufacturer’s restructuring intent.

The Treasury has already allocated 5 billion dollars to Gmac to increase its capital and 884 million dollars to GM to acquire Gmac shares. The American Treasury announced that it will ‘’soon” convert the 884 million dollars in privileged shares in ordinary shares, making it shareholder with a 35pct stake in Gmac. The 7.5 billion dollars loaned to Gmac include 4 billion which Gmac has to loan to Chrysler clients and dealers.

It looks like this development will address issues surrounding loans and the car industry. GMAC has been in sitting in pins and needles lately and with this new stimulus-plan like assistance from the US government, keep your fingers crossed that something should come out of it unlike the previous one which seemed to produce nothing beneficial for anyone.

(Source) AGI

Tags: billion dollars, car industry, car manufacturer, Chrysler, fingers, GM, GMAC, headlines, Loans, million dollars, stimulus plan, treasury

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While the car industry is desperately in a bind, it seems that GMAC is encountering rough sailing as well. But thanks to the support of the US government, help is on the way as the US Treasury is reportedly set to provide additional financial support for the trouble lender.

“It’s likely, again, that GMAC will need to take additional capital from the government and we’ll be prepared to provide that,” Geithner said in an interview with Reuters on Friday. Results of ’stress tests’ released on Thursday showed that 10 of America’s 19 largest banks need a total of $74.6 billion in new capital to boost their cash reserves in the event of a deeper economic slump.

US Treasury Secretary Timothy Geithner said there were signs that the economic downturn was coming to an end. However, he warned that there was still ‘a long way to go’ before the world’s largest economy would have a full recovery. The Treasury has already provided $6 billion in aid to GMAC, which is a vital provider of loans for buyers of US-made cars.

(Source) Press TV

Tags: banks, bind, car industry, cash reserves, economic downturn, economic slump, economy, GMAC, government aid, Loans, reuters, rough sailing, signs, stress tests, timothy geithner, treasury secretary, us government, us treasury

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GMAC, the financial arm of General Motors, announced this week that its global automotive finance business posted a net loss of $1.31 billion in the fourth quarter of 2008, and a loss of $2.07 billion for the entire year. In 2007, GMAC had a net income of $137 million for the fourth quarter of 2007 and a $1.48 billion in profit. GMAC blamed the losses on problems with auto leases, the declining value of financed cars, and credit losses on vehicles (repossessions).

In December of 2008 the U.S. Treasury bought a $5 billion stake in GMAC to keep it afloat. During the fourth quarter of 2008, new vehicle financing through GMAC fell dramatically as Americans lost jobs and the credit crunch hit the industry full force.  Despite the huge losses, GMAC was able to create a 2008 profit on paper by means of a $6 billion federal bailout and an $11.4 billion gain tied to a $21.2 billion debt swap meant to boost capital.

Tags: Auto Bailout, GMAC, losses

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