GMAC still has no business plan even after receiving a $17.2 billion investment
By Andrew C., 26 Aug, 2010. 0 Comments
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According to a congressional panel, GMAC Inc. has yet to submit a business plan after it had been granted a $17.2 billion investment from the government. In addition, the panel criticizes the Treasury Department for being lax in ensuring that the bank repays taxpayers. The Congressional Oversight Panel is responsible for overseeing Treasury's spending of Troubled Asset Relief Program funds. In a statement, the panel said that Treasury is not demanding for GMAC to present a path to viability or a strategy for fully repaying taxpayers. It is recommending that Treasury consider breaking up GMAC and merging its auto-finance unit back into General Motors Co. Doing so would re-establish GM's financing operations to a model used by several other automakers. GMAC reportedly lost $8.3 billion on its mortgage business last year, amounting to more than 80% of its total net losses. The panel is headed by Elizabeth Warren, a Harvard University law professor. [via autonews]
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