Congressional Panel Says GMAC Has No Business Plan, Suggests Break Up
WASHINGTON - GMAC Financial Services still has no business plan even after receiving a $17.2 billion investment from the government, and the Treasury Department has been lax in making sure that the bank repays taxpayers, a congressional panel said. According to the panel, Treasury should consider the possibility of breaking up GMAC and merging its auto-finance unit back into General Motors Co., Automotive News reported. That measure would restore GM's financing operations to a model used by a number of other automakers, said the panel headed by Elizabeth Warren, a Harvard University law professor. GMAC lost $8.3 billion on its mortgage business last year, which amounted to more than 80 percent of its total net losses, the panel's report said. "We appreciate the panel's responsibility to analyze history; however, GMAC's management team is focused on the future," GMAC said in a statement. "That includes continuing to provide the highest level of service to auto dealers and consumers in support of our auto partners, returning GMAC to a high level of profitability, and repaying the U.S. Treasury." Treasury, in a statement released this afternoon, said, "Treasury continues to be a reluctant shareholder and to manage its investment in GMAC in a hands-off commercial manner consistent with the administration's established principles that guide Treasury's management of financial interests in private firms." As for its past decisions not to restructure GMAC, the federal agency said, "After considerable analysis and deliberation, Treasury viewed the course taken as the least costly and least disruptive of all the options available." The congressional panel found that the government missed chances to increase accountability and ensure repayment of taxpayers' money with its early decisions to rescue GMAC rather than pursue other options as part of a broader auto industry bailout. Treasury has said that it was necessary to support GMAC because of the company's dominant role in floorplan financing and that failure to do so would have undermined the government's investments in the auto industry. In 2006, GM spun its credit arm off into a company that today is the 14th largest bank holding company in the United States.
More Industry

RV Group Expands Carolina Footprint
Blue Compass RV Columbia Northeast is the 13th RV dealership owned by Blue Compass in the Carolinas.
Read More →
Agent Acumen
An Agent Summit panel of people who’ve been supporting auto dealers for years gave both timely and timeless advice for those starting out or mulling the prospect.
Read More →
Missed Maintenance Creates Opportunity
As families get back on the road and into daily school routines, service drives have an opportunity to capture customers who are behind on recommended vehicle maintenance.
Read More →
Mitsubishi Unveils U.S. Plan
The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.
Read More →
Selling to Grow
The question of whether you should sell your agency and if so, when, is up to you. But it’s a question worth asking to ensure you keep the business on the right path for yourself, employees and clients.
Read More →
Recalled Vehicles Hit 5-Year High
Though the number of events has fallen so far this year, impacted units are up significantly. Meanwhile, regulators consider consumer notification changes.
Read More →
Auto Group Acquires Top-Performing Rooftop
Car Pros sold its Kia Huntington Beach location to Sutherlin Automotive Group, marking the buyer’s third location in Southern California.
Read More →
China as Pacesetter
Automotive leaders huddled on where North America stands in the global picture and how it can strengthen its position against the Asian juggernaut’s surging industry.
Read More →
BMW Concept Car Makes Fuel to Burn
The prototype developed in concert with a South Carolina university engineering team generates more solar energy than it uses in a typical daily commute.
Read More →
South Carolina Auto Group Downsizes
Florida-based group Holler-Classic has acquired four rooftops, its first in South Carolina, from Dick Smith Automotive Group.
Read More →