GMAC Needs More Loan And Lease Subsidies To Survive

Having recently posted a nearly $5b loss, bailed-out auto finance giant GMAC says it needs more help from automakers to remain competitive. Automotive News [sub] reports that GMAC CEO Mike Carpenter told reporters that “the success of GMAC Financial Services hinges on more loan and lease subsidies from General Motors Co. and Chrysler Group,” and that “GMAC requires additional marketing funds from the automakers to provide competitive loans and leases to the GM and Chrysler dealer networks.” GMAC’s Chrysler business has nearly doubled in the last quarter of 2009, now providing about 26 percent of Chrysler’s retail financing and about 30 percent of GM’s.

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Congressional Oversight Panel: Why Did We Bail Out GMAC Again?

The TARP bailout of GM finance partner GMAC is being criticized by a congressional oversight panel [full report in PDF format here], reports the Detroit Free Press. The panel alleges that the Treasury

has not yet articulated a specific and convincing reason to support the company… It has never stated that a GMAC failure would result in substantial negative consequences for the national economy. If Treasury has made such a determination, then it should say so publicly.

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Bailout Watch 579: GMAC To Score $3.5b More
The underlying cause of GMAC’s failure was no different than so many other American financial institutions: giant bets on risky mortgages at the heigh…
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Chrysler's Latest Metal-Moving Trick: Retiree Leases Are Back
Well, we’ve been here before… about this time last year, to be exact. The Freep reports that Chrysler, which had to quit leasing for much of las…
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DetN Bailout Report: White House Forced Rapid Bankruptcy, UAW Refused Hourly Pension Freeze

On October 13th of last year, when TTAC’s Bailout Watch clocked in at a mere 115 entries, GM’s then-CEO Rick Wagoner and board members Erskine Bowles and John Bryan approached the Treasury for a “temporary” bailout. Not that we knew it at the time. “In this period of continued uncertainty in the markets, you really can’t rule out anything,” said GM spokesfolks at the time. “Stand by for another big public investment in a failing firm,” warned TTAC. As subsequent events proved, the rush to bailout had already begun. Funny then, that we’re only now learning some of the most crucial details of the chaotic maneuvering of late 2008, thanks to a Detroit News investigation. Though the industry’s disastrous hearings before congress nearly derailed the deal, the initial strategy of approaching the White House would prove to be the key to the eventual bailout. In fact, President Bush was ready to provide $25b to GM, Chrysler, GMAC and Chry-Fi on December 19, only to have talks with the two finance firms break down. Instead, GM and Chrysler were given $9.4b and $4b respectively, with GMAC getting $7b 10 days later and Chrysler receiving $1.5b in January.

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Bailout Watch 573: GM Bailout Cost Taxpayers $12,200 Per Car

This according to the National Taxpayer’s Union report “ The Auto Bailout: A Taxpayer Quagmire,” authored by Rochester Institute of Technology Professor of Economics, Thomas D. Hopkins. That number includes the $52.9b taxpayer “investment” in General Motors, as well as GM’s portion of the GMAC bailout, which brings GM’s taxpayer tab to over $60b. Chrysler’s GMAC-inclusive bailout bill totals $17.4b, or $7,600 per vehicle, based on estimated 2009/2010 sales. Don’t believe that GM or Chrysler will match their projections over the next twelve months? The NTU estimates that total government support for the auto industry comes out to $800 per taxpaying American family. These numbers do not include the Cash for Clunkers program, likely future bailouts of GMAC (projected at a further $2b), or Department of Energy retooling loans (ATVML). These numbers also do not reflect the very real possibility that GM, Chrysler and GMAC could continue to drain taxpayer money post-2010. “For each year of survival beyond 2010,” the report warns, “the burden per vehicle would decline [Ed: but not disappear] – so long as no additional government funding is provided.”

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Chrysler Dealers Appeal to Marchionne in GMAC Dispute
“I don’t see anyone bleeding to death,” Sergio Marchionne told reporters and analysts a week ago, when asked what he thought of Chrysler&rs…
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Bailout Watch 374: Obama Admin Favors Multiple Car Czars

An increasing number of media reports are indicating that instead of a single “car czar,” Obama will appoint a team to oversee the auto industry turnaround effort. Current reports indicate that Democrat fundraiser Steve Rattner will likely take the top oversight position, but his total lack of (non-political) qualifications for the job is considered an issue. Which is where Stephen Girsky comes in. “They clearly need an adviser who knows the industry,” former Chrysler president Thomas Stallkamp tells Bloomberg. “Girsky certainly knows the industry, and he was close to both GM and the union.” And though I have questioned whether Girsky’s UAW affiliations are best described in the past or present tense, this 2004 presentation (PDF) to Original Equipment Suppliers Association is decidedly prescient. Especially for 2004. And this December 2008 presentation to UAW Local 14 seems to indicate that his recent advising stint with the UAW was a mission of truth and reconciliation rather than one of conniving and obfuscation.

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  • Formula m How many Hyundai and Kia’s do not have the original engine block it left the factory with 10yrs prior?
  • 1995 SC I will say that year 29 has been a little spendy on my car (Motor Mounts, Injectors and a Supercharger Service since it had to come off for the injectors, ABS Pump and the tool to cycle the valves to bleed the system, Front Calipers, rear pinion seal, transmission service with a new pan that has a drain, a gaggle of capacitors to fix the ride control module and a replacement amplifier for the stereo. Still needs an exhaust manifold gasket. The front end got serviced in year 28. On the plus side blank cassettes are increasingly easy to find so I have a solid collection of 90 minute playlists.
  • MaintenanceCosts My own experiences with, well, maintenance costs:Chevy Bolt, ownership from new to 4.5 years, ~$400*Toyota Highlander Hybrid, ownership from 3.5 to 8 years, ~$2400BMW 335i Convertible, ownership from 11.5 to 13 years, ~$1200Acura Legend, ownership from 20 to 29 years, ~$11,500***Includes a new 12V battery and a set of wiper blades. In fairness, bigger bills for coolant and tire replacement are coming in year 5.**Includes replacement of all rubber parts, rebuild of entire suspension and steering system, and conversion of car to OEM 16" wheel set, among other things
  • Jeff Tesla should not be allowed to call its system Full Self-Driving. Very dangerous and misleading.
  • Slavuta America, the evil totalitarian police state