It Is Liberation Day for GMAC

General Motors Acceptance Corp. celebrated liberation day Nov. 30 with an aggressive notice to non-GM brands, their captive lenders and dealers.

General Motors Acceptance Corp. celebrated “liberation day” Nov. 30 with an aggressive notice to non-GM brands, their captive lenders and dealers.

GMAC CEO Eric Feldstein says that, as a newly independent financial services provider, the once-full GM subsidiary will pursue floorplan, F&I products and dealership support services of non-GM vehicle brands.

“From now on,” Feldstein exclaims, “we want, and will go after as competitively as we can, capital loans and F&I products and services business of all other brands. Subaru, Hyundai, Nissan, Suzuki and all the rest, GMAC wants you!”

GMAC has agreed with the consortium, which purchased 51% of its stock from parent GM, that it would remain for at least 10 years as the exclusive provider of GM-sponsored auto finance programs.

But Feldstein makes it clear that GMAC now feels free to do business — outside the core area — with non-GM dealers.

“We have become a truly independent financial services provider with a new 13-person board of directors composed of GM officers as well as officers of the group which is now our majority owner,” he says.

The consortium is led by New York City-based Cerberus Capital Management.

As part of the purchase, GM received a final GMAC dividend of $2.7 billion even though GM retains 49% of GMAC's equity. In previous quarters, GMAC was paying its parent quarterly dividends ranging from $500 million to $1 billion, funds which the auto maker needed for vehicle operations as sales and market share declined.

Feldstein says GMAC will henceforth seek to bolster F&I sales per vehicle sold and financed. He hints at becoming more aggressive in the subprime field.

GM has fielded questions from its dealers as to the future status of GMAC as their main F&I provider and floor planner. GM CEO Rick Wagoner says, “All parties are committed to maintaining a high degree of service to our dealers.”

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish