Now that the U.S. Government bailed out Bear Stearns, Fannie May, Freddie Mac, and AIG, which firms are next in line for federal aid? Lest things change drastically, it could be the domestic automakers’ financial operations.
Official word from the White House implies that GMAC, Chrysler Financial, and Ford Credit – the leasing/financing wings of GM, Chrysler, and Ford, respectively – could be involved in the Trouble Asset Relief Program, known colloquially as the “$750 billion Wall Street bailout.”
“It’s possible that some of these financing arms could be a part of the rescue package,” said White House spokeswoman Dana Perino. “That’s one of the reasons Treasury has been in contact with them.”
According to The Detroit News, the majority of talks have involved GMAC, GM’s financial branch that’s partly-owned by Cerberus Capital Management, which is also Chrysler’s parent firm. GMAC has spoken with the Department of the Treasury, FDIC, and Federal Reserve about securing additional financing to maintain its business.
Such funding could help ease the pains of the financial divisions, but would be in addition to the $25 billion loan to automakers approved in September.
Source: The Detroit News