GM-GMAC asking for more bail out money

www.facefwd.com ^ | 10.29.09 | faced

[faced]

GMAC, the financial lifeline for General Motors Co., Chrysler Group LLC and their dealer networks, is asking the U.S. Treasury for more federal aid beyond the $12.5 billion it’s already received, because it remains billions of dollars short of a capital reserve requirement all bank holding companies must meet.

The request, which is subject to ongoing negotiations, comes as GMAC is caught in a financial game of chicken with Chrysler Financial that could drive some large Chrysler, Jeep and Dodge dealers out of business or force them to sell their operations.

Chrysler Financial, which Treasury has demanded go out of business by the end of 2011, is asserting its first-lien rights on loans to Chrysler dealers. At the same time GMAC, due to its capital shortfall, has asked those same dealers to pay additional collateral on the vehicles they order from Chrysler Group. Many of those dealers borrowed $10 million or more to expand their showrooms, and can’t sell the property for anywhere near what they owe Chrysler Financial.

It’s unclear whether additional taxpayer aid to GMAC would alleviate that problem.

The government already owns 35% of GMAC as a result of the government-financed bankruptcy restructuring of General Motors. Additional government assistance could give taxpayers a majority stake and raise questions about the Obama administration’s statements that it doesn’t want to run auto companies. GMAC, which the Obama auto task force chose as the primary source of financing for both Chrysler and GM, must be healthy if either manufacturer is to sell enough cars to stem their declining market share and repay their own government loans.

For the rest of the story:

http://www.freep.com/article/20091028/BUSINESS01/91028022/1322/GMAC-may-get-3rd-helping-of-aid

Face Forward Comments:

You mean that cracker jack team of Union bosses and government appointed overseers have not been able to crack the profitability code yet? Whoops, now that I think about it, has any government appointed overseer or any union boss ever cracked any profitability code anywhere?

Of course we are going to give the money to GM. We gave money to fund a (foreign) car company that Al Gore invested in, so why wouldn't we turn more money over to GM and the unions.

Everything about the GM deal is so crooked and full political payoffs it sickens me. Besides the American Tax Payer, stock holders, and former dealerships as the obvious looser in the deal, think about the people that have seen the value of their car drop because they were unlucky enough to have bought a GM....Imagine all of Hummer owners when they found out that the brand was going to China. And my favorite, imagine all of those people that bought a Saturn. The deal was done and Penske was going to buy the brand. Then suddenly, after Saturn (GM) was able to move all of their old dead stock with Cash for Clunkers, the Penske deal is off. Sorry if you already owned a Saturn. How could you have known it was going so bad for GM. But for those of you that bought after the car bailout, well, you already knew the government was involved so you really should have seen that one coming.

I know it is much to early to expect any kind of improvement given the economy, however do you really ever expect anything different from this company? Isn't this the way it will always be? My answer; I expect no changes and for GM to be on the public dole for the rest of it's existence. It was already a bureaucratic nightmare and will be even more so now that no one there will be able to make a decision without presidential approval. We all know his decision making process, dithering.

As for me, I am buying a Ford F-250 and hoping that GM and the rest of the politicans that bought them, go away

[Westlander]

Fiat will eliminate all cars in the Dodge line-up except for Charger & Challenger. More U.S. plant closures while Fiat unloads their debris. All paid for by you & I.

[Lurker]

Mark my words in less than 3 years GM and its associated entities will be line items in the Federal budget.

[Tupelo]

Government Motors Corporation is nothing more than another federal job program. Another CCC! only this time for high paid line workers.

[calex59]

Yes indeed, feels great to be blackmailed by a private industry doesn’t it? Or should I say by a Bozo owned Industry? These creeps simply need to fail and stop sucking the taxpayers dry.

[Uversabound]

I have a girlfriend whose husband works for GM. When we used to go to lunch together, I would envy the fact that she bragged that he made up to $100 an hour with overtime. They moved to Lousiana to keep his job. Now, he is going to lose his job. He feels so entitled. Oh Well!!

In the meanwhile, my husband and I drove 11 & 12 year old cars to save for our old age. I have scrimped and saved for years, not a big clothes horse or jewerly buyer...