New GMAC Chief: Become a Premier Auto Finance Company
November 17, 2009
Michael Carpenter, a board member turned new chief of GMAC Financial Services, vowed to make the company into "a premier auto finance company," something it has not been of late.
Troubled GMAC provides loans to General Motors customers and dealers and eventually will do the same for Chrysler but itself has been living on government loans to survive.
"The top priority is to turn GMAC into a premier auto finance company and pay back the government in a reasonable time frame," Carpenter said. "I am confident we can achieve that."
Carpenter replaced Alvaro de Molina, who was ousted Monday after less than 18 months heading the troubled lender, recently negotiating its third-round of government funding. GMAC already has received $12.5 billion from the U.S. Treasury's Troubled Asset Relief Program (TARP).
Still, it lost $767 million in the third quarters, largely due to bad loans in its ResCap mortgage division though auto lending posted a profit. Further, GMAC has been unable to raise funds in the markets, something it needs to do as it takes on lending responsibilities for Chrysler Financial, being merged with GMAC. Financing is the lifeblood of the auto industry and is critically important if General Motors and Chrysler, both of which emerged from Chapter 11 bankruptcy this summer, are to have any chance of success.
DeMolina became head of GMAC when Cerberus Capital Management, the previous owner of Chrysler, took a 22 percent stake in the finance company.
Posted by Michelle Krebs at 6:47 AM under Chrysler , Companies , GM , News | Comments (0) | digg this | Seed Newsvine
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