GM sells all of its Stock in Ally, formerly GMAC

GMAC has reappeared in the auto lending as GM Financial.

GMAC – now Ally – reappears  in the auto lending as GM Financial.

General Motors Co. (NYSE: GM) has completed the sale of its 8.5% ownership in Ally Financial, formerly GMAC for $900 million. GM expects to record a gain of approximately $500 million, which will be treated as a special item in the fourth quarter of 2013.

Ally Financial leads all auto-lending firms because the taxpayer-owned company extended credit on 1.5 million new and used vehicles through franchised and independent dealers last year.

“This transaction releases capital from a non-core asset and further enhances our financial flexibility,” says Dan Ammann, GM executive vice president and chief financial officer. “Ally continues to play an important role in financing our dealers and customers in the United States.”

GM’s plan is to put back in place a GMAC-like operation, dubbed GM Financial, with many of the companies coming from Ally, which was GMAC and went bankrupt at the onset of the Great Recession because of its reckless home lending practices. A controversial U.S. taxpayer-funded bailout ensued, one that has not been paid back.

GM Financial has acquired Ally’s international operations in Europe and some other countries in Latin America. These international acquisitions, announced in November 2012, also cover partial ownership in a joint venture in China, which is awaiting regulatory and other approvals, but is still expected to close in 2014.

Upon the completion of all the international acquisitions, GM Financial will be present in 19 countries, lending to more than 16,000 dealers and providing auto finance products in markets that cover ~80% of GM’s worldwide sales volume.

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About Ken Zino

Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
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