GMAC Is Here To Help. Unless You're A Dealer.

Edward Niedermeyer
by Edward Niedermeyer
gmac is here to help unless you re a dealer

Good news, everyone! A finance company whose risky investments in auto and real estate loans required it to beg for $6B in bailout cash is at the ready to teach you the secrets of smart financial planning. According to a release at PR Newswire, GMAC “has bolstered its effort to provide consumers with personal finance education with a $20,000 grant to InCharge® Education Foundation, Inc. (ICEF). The funding will be used to co-sponsor a series of financial literacy courses throughout the country in 2009. The courses, named ‘Smart Edge by GMAC,’ are designed to help people make better financial decisions by providing them with information about budgeting, real estate and automotive finance, insurance, credit reports, credit scoring, and other tools.” Lesson number one? Pay your CEO $11.6M even if you’ve been bleeding red ink all year. Lesson number two? Savagely screw over the people your business relies on.

GM and GMAC have stripped All American Buick Pontiac GMC of Marshall County, Texas, of its entire inventory after a court overturned a restraining order against the automaker and its finance arm, reports the Marshall News Messenger. All American’s lawyers have hit back, filing a a federal complaint alleging fraudulent inducement, fraud, fraudulent misrepresentation, fraud by nondisclosure and promissory estoppel (known to you and me as an “action which prevents a party from acting in a certain way because the first party promised not to, and the second party relied on that promise and acted upon it”).

According to the lawsuit, GMC did not halt vehicle shipments during the recent sales downturn. “Rather, GMC continued to ship vehicles to All American until its floor plan was maxed out at 100 percent. The floor plan interest commenced the day the vehicles were put in transport.” The suit also claims GMC began requiring dealerships to pay up front for all ordered parts. Meanwhile, GMAC required All American to pay additional money for all used cars that were sold as well as reductions on used cars. Finally, GMC stopped paying dealer rebates due on new vehicle sales on a weekly basis, opting instead to pay them every third week. “This particularly hurt All American’s cash flow as GMAC required sold vehicles to be paid off in three days,” the lawsuit claims. “By doing this, the defendants were able to make it appear as if their financial strength was solid at the expense of their dealers.” reports that local dealer Lloyd Belt is facing similar problems with GMAC, alledging that the finance firm told Belt he needed to sell cars faster, and pulled their cars and their financing when sales didn’t improve. Belt believes it is cheaper for GMAC, to stop financing dealerships and push them out of business than it is for GM to buy out the dealerships, a charge GMAC denies. Interestingly, Belt’s Chrysler vehicles were the first to be pulled from his lot. GMAC is partially owned by Cerberus, which also owns Chrysler. Coincidence? Probably not.

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  • Johnthacker Johnthacker on Mar 19, 2009
    Wow, GMAC’s really sticking it to the people that give them a reason to exist! I have no sympathy for the dealers so long as they have all their sweetheart state legislation protecting them. You know, they could even be right that the vast majority of people don't want to buy direct, that dealers are helpful and necessary, and whatever. But as long as they have their legally enforced markets that make it illegal to buy direct, they're not just credible to me. On anything. Yes, I'm a little more ticked-off because I am the type of guy who likes to order cars and wishes he could do so without the middleman.
  • Superbadd75 Superbadd75 on Mar 19, 2009

    @ johnthacker: I prefer picking a car from the lot because dealers get desperate when something's been sitting around a while. I've gotten some good deals that way. If you get a set price, like GM employee pricing, then it doesn't really matter. Inquiring about that 2008 model when the '09s are rolling off the truck really helps motivate a dealer. Besides, I don't always know exactly what package I want, or if I'll like a color on a vehicle (I would have never bought a silver Trailblazer until I saw mine), or even if I'll like the way a car drives. Dealers are good to have, and they're not all scheisters. You just have to find a good one that you can work well with. For example, there's a Chevy place here in our area that I'd recommend to anyone for their honesty and willingness to work a deal and I drove past 2 others to buy my truck there. It's not about the dealership, it's about who runs it.

  • Redapple2 Cadillac and racing. Boy those 2 go together dont they? What a joke. Up there with opening a coffee shop in NYC. EvilGM be clowning. Again.
  • Jbltg Rear bench seat does not match the front buckets. What's up?
  • Theflyersfan The two Louisville truck plants are still operating, but not sure for how much longer. I have a couple of friends who work at a manufacturing company in town that makes cooling systems for the trucks built here. And they are on pins and needles wondering if or when they get the call to not go back to work because there are no trucks being made. That's what drives me up the wall with these strikes. The auto workers still get a minimum amount of pay even while striking, but the massive support staff that builds components, staffs temp workers, runs the logistics, etc, ends up with nothing except the bare hope that the state's crippled unemployment system can help them keep afloat. In a city where shipping (UPS central hub and they almost went on strike on August 1) and heavy manufacturing (GE Appliance Park and the Ford plants) keeps tens of thousands of people employed, plus the support companies, any prolonged shutdown is a total disaster for the city as well. UAW members - you're not getting a 38% raise right away. That just doesn't happen. Start a little lower and end this. And then you can fight the good fight against the corner office staff who make millions for being in meetings all day.
  • Dusterdude The "fire them all" is looking a little less unreasonable the longer the union sticks to the totally ridiculous demands ( or maybe the members should fire theit leadership ! )
  • Thehyundaigarage Yes, Canadian market vehicles have had immobilizers mandated by transport Canada since around 2001.In the US market, some key start Toyotas and Nissans still don’t have immobilizers. The US doesn’t mandate immobilizers or daytime running lights, but they mandate TPMS, yet canada mandates both, but couldn’t care less about TPMS. You’d think we’d have universal standards in North America.