Big Lender GMAC Asks for More U.S. Aid

[Kevin_Kennedy]

GMAC, the troubled consumer finance company, is seeking billions of dollars in additional federal aid, a move that would be its third taxpayer bailout and could give the government a majority stake in the company, according to people briefed on the situation.

GMAC and Treasury Department officials have been locked in negotiations over how to structure the third bailout as it approaches a crucial deadline in early November for shoring up its finances. The government has injected $12.5 billion into the company and already owns about a 35 percent stake from a broader restructuring of General Motors, its onetime parent.

http://www.nytimes.com/2009/10/28/business/28gmac.html?_r=1&ref=todayspaper

So how many more bailouts is it going to take to protect them from their own failures? We can't continue to prop up these failed businesses indefinitely. The market needs to reallocate resources and we need to allow it to happen. The more we postpone this process the longer we're going to suffer.

 

[pete]

I agree ... good thing the government stepped in to help

GMAC, which provides financing to car buyers, GM and Chrysler auto dealers and also owns the online bank Ally, continues to struggle mightily. The company reported a net loss of nearly $3.6 billion in the second quarter of this year and has lost a total of $7.65 billion since the begriming of last year. (Privately held GMAC will release its third quarter results on Nov. 4.)

The government owns a more than 35% stake in GMAC. Failure to keep propping it up could not only devastate GMAC but also lead to deeper problems for the auto industry given how much dealers and customers rely on GMAC for borrowing needs. That can't be allowed to happen.

More bailouts for GMAC show shortcomings of pay restrictions - Oct. 28, 2009

 

[Darkwind]

If they are not bailed out, how will 'The Obama' (may his life be pure) continue to hold the support of the 'The Union'. After all, no cars if there is no financing, right?