General Motors Co is considering options that would give it a captive auto financing arm and allow its dealers to offer more competitive loans and lease deals, two people with knowledge of the plans said.
Such a move would mark a nearly complete reversal of the process that started in late 2006 when GM sold off a controlling stake in GMAC to Cerberus Capital Management in order to raise cash for its own restructuring.
Detroit-based GMAC, now known as Ally Financial, is 56-percent owned by the U.S. Treasury after the government injected $17 billion as part of a restructuring that also saw the finance company become a commercial bank.
The U.S. Treasury also owns 61 percent of GM after providing nearly $50 billion to restructure the top U.S. automaker in a 2009 bankruptcy.
One option being considered would have GM take back the auto finance portion of GMAC, which provided financing for about 30 percent of GM's U.S. retail customers in the first quarter, said the sources who did not want to be identified because the discussions are preliminary.
Another option would have GM pair up with an outside bank in a partnership that would create a new auto financing company under its wing before it looks to sell its own shares in an initial public offering, according to the sources, who were not authorized to discuss the preliminary discussions.
GM Chief Executive Ed Whitacre, who is pushing GM toward an IPO as soon as this year, has argued in favor of taking back the auto finance portion of GMAC and retaining the GMAC name, the sources said.
Full story
