Providers and Administrators in blue logo
MenuMENU
SearchSEARCH

GMAC Plans IPO to Repay Aid

February 26, 2010
3 min to read


WASHINGTON — GMAC Financial Services plans to return to the stock markets with an IPO in the next two years, in a move aimed at gradually exiting from government help and eventually repaying its rescue aid, the auto lender's chief executive said.


GMAC Chief Executive Michael Carpenter's remarks, made during a congressional hearing Thursday on the government's intervention in the auto industry during the financial crisis, came as Treasury Department officials declared GMAC well capitalized and able to borrow again after three injections of U.S. taxpayer dollars, The Wall Street Journal reported.

Ad Loading...


"GMAC is also now able to secure external funding for its ongoing operations, a critical step toward its independence," the Treasury officials, Jim Millstein and Ron Bloom, said in a joint statement before the Congressional Oversight Panel.


Millstein, the Treasury's chief restructuring officer, said he didn't anticipate GMAC needing more government money beyond the U.S. aid it had already received, totaling about $16.3 billion.


GMAC, formerly a wholly owned subsidiary of General Motors Co. that is now majority-owned by the U.S. government, provides financing for thousands of GM and Chrysler Group LLC dealerships, as well as their customers. The company ran into trouble in late 2008, as the housing crisis dragged down its mortgage business, Residential Capital LLC, or ResCap, a subprime lender. It also suffered losses from auto loans.


Carpenter also said he didn't expect GMAC to seek additional government aid. He said an initial public offering would allow the company to begin repaying the U.S. loans, a process that he said could take several years.


While the IPO is unlikely to allow for a full repayment, he said, it would pave the way for subsequent offerings. "This would allow us to return to being an investment-grade credit, reducing our capital requirements, and begin the process of paying back the U.S. taxpayer in full," he said.

Ad Loading...


Responding to questions about ResCap, Carpenter said the firm was exploring a number of options. He said the business has been successfully walled off from the rest of the organization, and that a strategic plan was in the works. He added that GMAC was in the process of selling some of its mortgage assets.


Bloom, the administration's chief auto adviser, said the future of the U.S. auto industry would depend on policy makers' ability to restore the flow of credit to dealers and their customers. He and Millstein said in their statement that the government remained a "reluctant" shareholder in GMAC and other private firms. They said the Treasury planned to exit from its investment in the auto-finance firm through a gradual sale of shares, but as soon as possible.


They said the administration's decision to pump billions of dollars into the U.S. auto industry, and GMAC specifically, have steadied the U.S. auto industry, with the value of vehicles made by U.S. auto makers "stabilizing."


The officials said the Treasury continued to move to wind down certain programs, including an aid program for auto supplies that was expected to end in April.

More Industry

Showroomby Lauren LawrenceMarch 4, 2026

Used-Vehicle Program Aims to Draw More Buyers

GM says more than 750 dealers across the U.S. are enrolled in CarBravo and that in January CarBravo dealers sold over two times the certified volume of Chevrolet, Buick and GMC dealers using traditional CPO.

Read More →
Industryby Hannah MitchellMarch 3, 2026

Auto Dealers Cautiously Hopeful

Though traffic and profits were down in the first quarter, normally optimistic franchisees and independents saw dim current conditions while holding out visions of healthy spring sales.

Read More →
Industryby StaffMarch 3, 2026

Black Book: Weekly Market Update

Conversions picked up last week at wholesale vehicle auctions, according to the market observer, as the spring shopping season appeared to begin.

Read More →
Ad Loading...
white Audi car in a service bay
Industryby Lauren LawrenceMarch 3, 2026

Recall Service Reaches Milestone

Eight state DMVs participate in the Vehicle Recall Search Service created by Carfax and the Alliance for Automotive Innovation to reduce the number of unaddressed vehicle recall repairs.

Read More →
Industryby Hannah MitchellMarch 2, 2026

Meet the Editor: Hannah Mitchell

A longtime newspaper journalist, Bobit Dealer Group's editor was raised on news back in the South. Now she brings that news-hound ethic to our four auto retail magazines.

Read More →
Summit Updatesby StaffMarch 2, 2026

Enhance Your Dealer's F&I Workflow at Agent Summit

This session is designed to equip general agents with actionable strategies that can help their dealers enhance the efficiency of financial services managers.

Read More →
Ad Loading...
Industryby Hannah MitchellMarch 2, 2026

Auto Brands Hold the Line on Retention

A flat national rate despite inflation and other financial challenges shows industry loyalty stability, annual Reynolds and Reynolds research finds.

Read More →
two people shaking hands in front of a new car that says Smarter Deals Ahead
IndustryMarch 1, 2026

The State of M&A in the F&I Sector and What to Expect in 2026

Providers and administrators should clearly and credibly communicate their experiences since their numbers will draw more scrutiny this year.

Read More →
Industryby Lauren LawrenceFebruary 25, 2026

Report Finds Year-End F&I Strength

Deal volume ebbed and flowed throughout 2025, but product performance remained steady, according to automotive technology and data intelligence solutions provider StoneEagle.

Read More →
Ad Loading...
Industryby Lauren LawrenceFebruary 24, 2026

China Leads Battery Production

Between 2020 and 2025, gigafactory capacity grew six-fold and is set to grow another 118% by 2030, according Benchmark data.

Read More →