Breaking: GM looking at strategic options for GMAC

[nadepalma]

Breaking: GM looking at strategic options for GMAC

GMI has just learned this morning from a reputable source that GM is exploring strategic options for GMAC. This isn't surprising with problems in the market and a shakey financial outlook on Wall Street.

The obvious goal is for GM to raise much needed cash. However, since Cerberus now controls a 51% stake in GMAC, the private equity firm may be looking to get more money to fund its own operations.

It also follows closely on the heels of the news that GM is close to confirming the sale of HUMMER and a GM owned, French transmission factory.

Some could speculate that Cerberus is trying to leverge GMAC to buy the remaining 20% stake in Chrysler that it does not already own. Or perhaps Cerberus plans to somehow leverage both GMAC and Chrysler Financial (it owns both) to help it's liquidity to ride out the tought times ahead. Or any other measure behind the move.

Regardless, any move will need Cerberus' blessing to move forward.

Some of these options may include:

-Selling the money losing part of GMAC, dubbed Rescap. This unit is the mortgage unit of the GMAC group. If this happens, the GMAC Bank may also be sold in tandem with the Rescap mortage unit.

-Orchestrate another stake in GMAC being sold. GM could sell a portion of their remaining 49% stake to Cerberus or another company to raise additional funds (again, Cerberus would have to okay).

-A possible merger and/or sell off of GM's entire stake in GMAC. Seeing as how many financial firms have made moves to merge or pick off assets in light of the crisis on Wall Street, this may also be an option.

-Purchasing a bank with an IPO of GMAC, which would would allow Cerberus and GM to keep power, and take in alot of the profit/and loss of the combine company if set up correctly.

This by no means is a the last word on this. We will know more about GMAC's situation once the Board of Directors meets next month.

Stay Tuned!

[smsum2]

Where is your source for this?

[Chaz_23]

Can't they find someone as dumb as GM or the US government willing to pay twice what it's worth?

[CamaroCrazy]

I think its a good move for GM. Keep moving back to your core competency: building automobiles. They don't need to be so vertically integrated anymore, they need to be more agile. Many other industries are doing this very same thing.

[KingElvis]

Owning the bank and the debts owed you by the people buying your cars - gosh that made so much sense in the 1930's.

Why not now? Honestly. I want to know.

[Bravada]

Because that means you are financing yourself, while some happy-go-lucky subprime folks default on you and all you have are your own vehicles, slightly used.

In general, it makes a lot of sense to own your own financing corporation (if you're an automaker). But ATM, owning the huge amount of subprime debt is not the best option for GM.

[GM Loyal]

Trying to confirm this. Has the sale of Hummer been confirmed? What is the source of this information?
Is this still a rumor?

[GM2004]

As for the French Transmission factory, I believe they make one of the transmissions for the Pontiac Solstice/ Saturn Sky/Opel / Daewoo.

[RamJet502]

Who is buying Hummer?

[GM-Joe]

Originally Posted by smsum2

Where is your source for this?

There is no source, just speculation.

I just skimmed the one link at the top and in the first paragraph of that page said HUMMER was sold, at the bottom of the page it said that HUMMER is for sale; thus, nothing new.

[Caleb02]

i think it is a conflict of interest for cybrus to own chrysler fin. and also 51% of GMAC. The govt should of blocked Cybrus from getting chrysler fin. or should of made them sell its 51% in GMAC. if you think about it crybus now controls who gets loans on a gm product, now they could get rejected at gmac and then chrysler fin. gives them a call and approves them for a loan for a chrysler.

[Caleb02]

Originally Posted by RamJet502

Who is buying Hummer?

i am butting a plan together to purchase hummer, the transmision factory, and even sabb. I plan to offer gm an all cash package. My current evaluation based on current economic conditions, current auto sales, and the alike would value all of gm at $1.00. Based on that I plan to offer GM .20 cents for hummer. the transmission factory and sabb.
but that would be only paid out if hummer, the transmission factory, and saab are profitable, if they are not then gm would pay me to take them off its hands.

[Tstag]

Of course if GMAC could flog it's rescap debts to the US gov't then that would solve some problems.....

[Caleb02]

Originally Posted by Tstag

Of course if GMAC could flog it's rescap debts to the US gov't then that would solve some problems.....

why not a 700 billion bail out for detroit also? and how about 700billion to the tax payers which would equal 3100 us dollars for all americans. I say lets just nationalize evey thing and have the governement control everthing including what we think and read and write. i am caleb02 and the government approved this message..... or did they just want you to think that.

[jspillers]

Source???