Billions of Federal injections came to General Motors today as they received one “bailout” after another, thanks mostly in part to GMAC.
Last Wednesday, GMAC had all but staked their claim of TARP funding by changing over to a bank holding company. With a deadline quickly approaching, and sweat beading from the brow of GM exec’s, today the Treasury has allotted GM’s financing arm $5 billion. However, the Treasury did not stop there. Another $1 billion would be lent to GM in order to help in the reorganization as a bank holding company.
The fresh capital from the Treasury’s $700 billion Troubled Asset Relief Program will enable GMAC to expand lending to car buyers, which in turn may help save GM.
The NYTimes states:
The Treasury will buy $5 billion worth of preferred equity shares in GMAC, which used to be the financing subsidiary of General Motors and is now owned jointly by GM and Cerberus Capital Management, the private equity firm that owns Chrysler.
Both GM and Chrysler had been, and still are, working very hard in order for this to be finalized. Both companies had spokespeople saying they were in final stages of completing all the paperwork.
Currently, Reuters reports Ford Motor Co has said its liquidity was adequate for now and that it did not need a loan at this point. This comes at a time when both Chrysler and GM are dipping ever so deeply into their cash reserves.