Bailout money for the automakers is coming soon. Even if the government hasn’t yet decided to make GM and Ford eligible for the TARP, it looks like GM’s financing arm GMAC (partially owned by Ceberus) will find a way to get in. The Journal reports that plans are under way to become a bank holding copy and then head to washington hat in hand.
The mechanics of a bank registration for GMAC are complicated. GM may need to transfer at least half of its ownership in GMAC to Cerberus so that the automaker no longer owned more than 24.9% of the voting shares. That way GM won’t have a controlling interest in the firm under federal law.
As a bank holding company, GMAC could receive equity injections from the Treasury Department’s capital purchase program and have its debt temporarily guaranteed by the Federal Deposit Insurance Corp.
Separetely, it looks like GM will be the latest to scale back plans for more fuel efficient vehicles. The company has decided to scale back its spending plans for the coming years (smart). Among the potential casualties, the fuel efficient Chevy Cruze (never heard of it either) which could get pushed back.