Sources told the Wall Street Journal that General Motors Co. is thinking about buying back part of Ally Financial, its former GMAC auto loan business. According to people who claimed to be familiar about the matter, GM has yet to approach Ally Financial and so far, there is no sign if Ally would be open to a proposal. GM executives are considering a new approach to Ally Financial to give dealers better access to wholesale credit.
In late December, the U.S. government converted $5.5 billion of its preferred shares in Ally Financial into common stock, raising its stake to 74% and laying the groundwork to leaving its investment. AutoNation Inc. CEO Mike Jackson, the head of the nation's largest dealer group, said that GM has to pursue the idea.
Jackson said that GM needs a new finance company, similar to what it had with GMAC. He added that GM lacks a strategic partner in finance. He said that when one goes to leasing, ”it's still very thin for GM.” Jackson also said that the current situation is experienced mostly by subprime customers.