US Takes Majority Stake in GMAC

Government gives auto lender another $3.8B in aid
By Newser Editors and Wire Services
Posted Dec 30, 2009 6:40 PM CST
US Takes Majority Stake in GMAC
The government now has a majority stake in GMAC.   (AP Photo/Rusty Kennedy, File)

The government gave GMAC Financial Services another $3.8 billion in cash and took a majority stake in the auto lender, aiming to stabilize the company as it struggles with big losses in its home mortgage unit. The fresh infusion is on top of $12.5 billion in taxpayer money Detroit-based GMAC has already received from the government.

The new aid will boost the federal government's ownership in GMAC to 56% from 35%, and means the US now holds a majority stake in three companies that it bailed out with taxpayer funds—GMAC, General Motors, and AIG. Keeping GMAC alive has been a critical component of the Obama administration's effort to rescue GM and Chrysler. The lender provides critical wholesale financing to thousands of GM and Chrysler auto dealers, allowing them to stock their showroom floors with vehicles. (More GMAC stories.)

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