WHEN General Motors was bailed out,
the government sank $17 billion of taxpayers’ money into G.M.’s troubled
finance arm, GMAC.
Three years on, we’re still waiting
for the payback.
While the Treasury Department sold
most of its holdings in G.M. last year, it unloaded only a small portion of its
stake in GMAC, which is now known as Ally Financial. Taxpayers today own
roughly a quarter of G.M., but they still own 74 percent of Ally.
G.M. is making a lot of money (last
week, it reported a first-quarter profit of $1.32 billion) but all is not going
smoothly at Ally. While the company’s overall numbers are improving, its
mortgage unit is in deep trouble.
That unit, Residential Capital, missed
a $20 million debt payment in mid-April. Given that it has roughly $300 million
in debt payments coming due from now till June, speculation is rife that ResCap
will file for bankruptcy.
Rest here…
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