Following a $675 million first quarter loss, the U.S. government has ordered GMAC – the lending arm of General Motors and Chrysler – to raise an additional $13.1 billion in capital. GMAC’s first quarter results marked the company’s 10th consecutive quarterly loss.
Due to heavy losses in its mortgage and auto lending businesses, the federal government has ordered GMAC to secure $13.1 billion in new capital. That money is to be used to ensure the stability of the company moving forward.
Roughly $4 billion of that total will be used to secure the financing operations obtained from Chrysler Financial, including financing dealer and retail loans. The other $9.1 billion would go towards strengthening GMAC’s operations, per the government’s recent ‘stress test’.
According to the Washington Post, GMAC’s required $13.1 billion is the largest amount ordered by the federal government. However, that figure won’t be easy to obtain as most credit markets remain extremely tight. The U.S. government has already loaned GMAC $5 billion and it remains highly possible the U.S. government could get stuck with the bill for most or even all of GMAC’s newly required $13.1 billion.
05/07, 6:45 PM
posted by:
johnnycanuck
Good luck with the 0.1 never mind the 13.
05/07, 7:07 PM
posted by:
Mutant@DCX
Cererbus, get off your a$$ and do something!
05/07, 7:44 PM
posted by:
Pazzo Canguri
“marked the company’s 10th consecutive quarterly loss”
Beating a dead horse with a stick….
05/07, 10:08 PM
posted by:
Borat
What they gonna do? Rob a real bank
05/08, 11:15 AM
posted by:
jdasch1
They either need to raise capital or get more Tarp. GMAC soon will be owned by the US government. Look at their loan book…bad morgages and car dealer inventories/retail car loans. Who’s going to lend them money other than the Tarp or Talf?? This GMAC needs to survive in order for the GM and Chrysler dealers to have a finance source. If they(GMAC) doesn’t survive, both brands are dead as well as the retailers of them. Both are in for a rocky road, but this is where the dealer flushout begins and ends. No way to finance dealer inventories=dealers going out of business=goal of the new GM and Chrysler companies. Only the strong dealers that can get traditional banks to loan them commercial flooring money will survive. The rest that finally qualify for GMAC flooring will be “the governments beeatch”. Nice.
05/09, 9:38 PM
posted by:
Get Real
Good luck to them and Bank of America.
Paying .5% interest NOBODY is putting money into the crooks.