Chrysler has officially entered into Chapter 11 bankruptcy with the hopes of emerging as a stronger company on the other side, but the company’s financing arm, Chrysler Financial, may not even be a part of the ‘new’ Chrysler.
In a speech earlier on Thursday, president Obama announced GMAC – the primary lending arm of General Motors — would be taking over vehicle and dealer financing for Chrysler, displacing Chrysler Financial. President Obama failed to mention if GMAC would remain as Chrysler’s main lender after the automaker cleared bankruptcy, but it appears Chrysler Financial could be out as Chrysler’s lending arm.
Chrysler Financial was denied further government funding earlier this month after some of its top executives failed to sign a waiver capping executive compensation. While there is no clear evidence linking the unsigned waiver to the ousting of Chrysler Financial, it would seem the two are linked in some way.
Cerberus Capital Management – Chrysler’s parent company – fully owns Chrysler Financial and has a 51 percent stake in GMAC.
