DONE DEAL: GMAC Snags Another $3.5 Billion From Taxpayers


It’s expected that the Treasury Department will announce today that it will inject a further $3.5 billion into struggling auto finance company GMAC. This comes on top of $13.4 billion already provided.

While this additional capital has been discussed in the past, now it’s apparently a done deal.

Furthermore, there could be more Treasury support in the pipeline given that the Treasury has previously mentioned providing up to $5.6 billion in additional capital.

Thus it’s probably safe to assume another $2.1 will be injected (5.6 – 3.5).

If anything it’s increasingly clear that bailouts aren’t a one-time affair, since to simply let a company die would make previous bailouts look foolish.

Detroit News: Michael A. Carpenter, a GMAC board member who was named CEO last month, said in interview in November that the company was working to repay taxpayers “as soon as we prudently can.”

GMAC’s mortgage business “has been a drain on the company’s ability to execute its primary mission,” Carpenter said last month.

Options on the table include a sale, spinoff or bankruptcy filing of certain mortgage assets, he said. Treasury spokesman Andrew Williams said Tuesday the government has been in talks for months with the company.

Read more here.

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