GMAC to focus on autos

GMAC Financial Services, which is now Chrysler’s preferred lender for customers and dealers, is getting ready to sell large portions of its once lucrative real estate business, which has cost the company billions of dollars in the last year. According to the Oakland Press, as quoted in the Detroit News, GMAC expects to lose $5 billion in the fourth quarter; analysts had previously suggested that much of this would be due to writeoffs coinciding with a government investment in GMAC. The U.S. Treasury will provide $3.8 billion in capital, some in the form of loans and some in the form of stock, which will make the Treasury GMAC’s majority shareholder. If the economy continues to slowly improve, the government may end up with a substantial profit on the deal.

GMAC is to focus on its automotive services; the loan company is vital to General Motors and Chrysler, with the availability of loans and leases often being the deciding factor in a sale.

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