Will GM buy Chrysler Financial?

[XDCX]

A Bloomberg report indicating that Chrysler Financial has been contacting dealers exploring various plans to re-enter the market is no surprise to the members at DealershipForum - we've been discussing it for weeks.

That said, the report is informative and goes beyond what we've discussed here. For a link to the report - click here

Surprisingly, there was no mention about the possibility of GM purchasing Chrysler Finance. In my opinion, that's the real story and the best possible use for CF. Time will tell.

[crowe]

Doesn’t that dog from hell Cerberus still control both GMAC & CF?

[XDCX]

Originally Posted by crowe

Doesn’t that dog from hell Cerberus still control both GMAC & CF?

At one point Cerberus had control of both GMAC and Chrysler Financial but that's no longer the case.

According to the Bloomberg report, Cerberus controls Chrysler Financial with a 20% equity interest and the remaining equity is held by a syndicate of investors.

Concerning GMAC/Ally, the tax payers have the largest share and Cerberus has been reduced to a 14.9% equity position.

[XDCX]

When I read the Bloomberg report yesterday I thought the following excerpt was ironic - "When Chrysler filed for bankruptcy-court protection April 30, 2009, Obama said that its captive lender could survive only with a “large stream of money,” which he refused to provide."

As memory serves, GMAC had to go to the U.S. Treasury THREE times for capital infusions and yet the Task Force determined GMAC was more viable than Chrysler Financial.

I'm no fan of Cerberus given the damage they inflicted on Chrysler. That said, there's part of me that would love to see Chrysler Financial prosper just to provide further evidence that politics played a major roll in the Task Force's decision process.

[ohiobuckeyes]

Autonews is reporting the GM has purcahsed AmeriCredit for it's captive finance company
AmeriCredit Corp. in an all-cash deal valued at $3.5 billion.


Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz0uQ5xlsqg

You hear it in the forum first.

[XDCX]

Originally Posted by ohiobuckeyes

Autonews is reporting the GM has purcahsed AmeriCredit for it's captive finance company
AmeriCredit Corp. in an all-cash deal valued at $3.5 billion.

I just read the story and the acquisition of AmeriCredit makes sense from the standpoint of allowing GM to get back into the consumer loan market as a captive. That said, GM officials indicated they expect AmeriCredit to make up less than 10% of the loans made to GM customers.

I'm still betting that GM has an interest in CF. CF provides a solution for getting back in the floorplan and leasing business and as Ralph mentioned, CF has the systems and technology that would provide GM with a "turn-key" solution. Time will tell....

[crowe]

Is that the taxpayer’s $3.5 billion GM is going to spend?

I hope GM doesn’t buy AmeriCredit’s existing loans, AmeriCredit probably has some of the worst paper on earth.

We use AmeriCredit for deep secondary subvention for KIA.

[XDCX]

Originally Posted by crowe

Is that the taxpayer’s $3.5 billion GM is going to spend?

I hope GM doesn’t buy AmeriCredit’s existing loans, AmeriCredit probably has some of the worst paper on earth.

We use AmeriCredit for deep secondary subvention for KIA.

There has been some criticism that the money GM is using to buy AmeriCredit could have been used to pay-down their debt to the Treasury.

That said, I'm in the camp that GM needs a captive and the likelihood is it's cheaper/faster to buy AmeriCredit that to build one from scratch. I'm still surprised that GM hasn't done a deal with CF since that would provide them with the ability to get back into the flooring business.

Concerning AmeriCredit's portfolio and how it's performing, I haven't had a chance to study it. To the extent they're a publicly traded company I'd imagine most of the details are available in their 10-Q filing.

While I know GM needed to be bailed out to survive, I hate the whole concept of the tax payers having equity in a private company. If the AmeriCredit deal makes it easier for GM to put their IPO together, I'm all for it.

[XDCX]

As many of our members know I spend a lot of time checking IP Addresses to see who's been reading the forum and to ensure that access to AREA 51 remains secure.

Earlier today I noticed a guest was trying to add a post to this thread but they were blocked by the system. In fairness, I won't divulge the source of the IP Address but I'll extend an offer to any of our guests that they can use the "Contact Us" link at the bottom of the page and I'll add their comments to this thread.

Maybe there's something going on, and maybe there isn't, but I think it's interesting that this thread continues to draw traffic.