Replies to post #146122 on Simply Politics and News (GOV)

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good post

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KIMBERLY S. JOHNSON (AP) - AP Auto Writer DENVER GMAC Financial Services has applied to become a bank holding company, which would allow General Motors' financing arm to be eligible for aid under the government's $700 billion bank rescue plan.
GMAC said Thursday the change in status would shore up its capital position and allow it to continue providing automotive and mortgage financing.

GMAC is majority owned by the private equity firm Cerberus, which also owns most of Chrysler. General Motors Corp., which itself is running out of cash, owns a 49 percent stake in GMAC.

GMAC also is launching cash tender offers to buy or swap debt held by its units and mortgage business Residential Capital LLC for cash, new notes or preferred stock, in a move to boost capital levels and reduce debt.

The financing arms of Ford Motor Co. and Chrysler LLC may also apply to become bank holding companies, and therefore become eligible for a piece of the financial bailout being administered by the Treasury Department.

Earlier this month, GMAC reported its third-quarter loss widened to $2.52 billion compared to a loss of $1.6 billion a year ago. Steep losses at the company's insurance division weighed heavily on the results.

GMAC also warned that its mortgage lending division, ResCap, could fail. In September, GMAC announced it would close all of its 200 retail offices and lay off about 5,000 employees, with the bulk of cuts coming at ResCap. The division lost $1.91 billion in the third quarter, compared with $2.26 billion a year ago.

GMAC has tightened its criteria for U.S. consumers seeking financing, including limiting purchases to those with a credit score of 700 or above and limiting how much financing about the value of a new car consumers can receive.

Shares of GM fell 24 cents, or 8.6 percent, to $2.55 in morning trading.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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DETROIT (Reuters) - Shares of General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) tumbled more than 35 percent to hit a 70-year low on Thursday as prospects dimmed that lawmakers would reach a compromise on a proposed $25 billion bailout for U.S. automakers before Congress adjourns this week.

Shares of Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) also fell, dropping nearly 17 percent to their lowest level in 27 years, and auto parts suppliers declined across the board amid concerns a failure by one of the U.S. automakers would touch off a cascade of failures in the struggling industry.

Without a deal this week, any bailout is likely to have to wait until the new Obama administration takes over in January, by the time GM has warned it would run desperately short of its minimum cash needs.

Failure to craft a deal carries the risk that one or more of the U.S. automakers -- GM, Ford or Chrysler LLC -- could be forced into bankruptcy, analysts have warned.

Citigroup analyst Itay Michaeli said little progress appears to have been made to break the stalemate in the Senate over the mechanics of sourcing a $25 billion loan package. Any government actions to provide bridge loans are not expected to entirely solve GM's liquidity outlook through 2009, he added.

"We remain concerned that failure to obtain liquidity through this session may contribute to stakeholder perceptions that Detroit's liquidity options are dwindling, which in itself could increase the risk of a working capital driven liquidity crunch," Michaeli said in a research note.

Chances dimmed that a last-minute plan being crafted by Republican U.S. Senators, with White House support, to provide $25 billion to bail out U.S. automakers would receive enough backing from Democrats to pass before the end of this week.

Shares of GM were down 36.92 percent, or $1.02, to $1.78 in morning trade, after earlier plunging to $1.70, their lowest level since 1938.

Shares of Ford fell 21 cents to $1.05, their lowest level in 27 years, while auto parts supplier TRW Automotive (TRW.N: Quote, Profile, Research, Stock Buzz) tumbled nearly 22 percent to $2.10.

(Reporting by Soyoung Kim, editing by Dave Zimmerman)

[makesumgravy]

Absolutely.....................I liked the question posed to the Ceo's who were informed that they were still under oath.

Senator's question - " I would like to ask if any one of you flew here today by Commercial Airline to request money for your company, if so please raise your hand"?

Ceo's response - Not one hand.

All flew in by Corporate Leer Jet. A1-First Class with all the amenities. The pilot works for them.

I wondered about their solo trips to China, Russia, Mexico and various other points of interest they no doubt share with their wives and family.............Paid vacations via the shareholders.

The follow up question did they think of selling those jets to help raise needed funds, the cost of fuel and maintenance today is extreme when the companies are starring bankruptcy in the face?

Again, no response.