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Old 12-14-2008, 04:54 PM   #1
XDCX
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Default 40% of GM Dealers could fail if GMAC goes Bankrupt

A news report quotes a member of GM's National Dealer Council that as many as 40% of GM's dealers may fail if GMAC is forced to file for bankruptcy.

GMAC is currently working with their existing bond holders in an effort to secure $30 Billion in capital so they can qualify to be a bank holding company. GMAC has been trying to change their status to a bank holding company so they can have access to the TARP funds.

If GMAC is not able to access the TARP funds they may be forced to file bankruptcy and suspend their financing of wholesale inventory. Given the current health of GM's dealerships, it is thought that as many as 40% are not strong enough to secure another floorline.

Here's a link to the news report: http://www.bloomberg.com/apps/news?p...21D.U&refer=us
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Old 12-14-2008, 11:50 PM   #2
XDCX
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Default Automotive News covers the story...

I noticed that Automotive News just covered this story.

It's mostly re-hash with the exception that they estimate that as many as 50% of GM dealers could be forced into bankruptcy if GMAC fails.

The one statistic I found most interesting was GMAC's penetration as a percentage of GM's retail sales. Historically about 50% of GM's volume was financed by GMAC - last month it was 6%.

What do Chrysler and GM dealers have in common? They're both getting screwed over by Cerberus.
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