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Oversight panels suggests GMAC break up, merger with GM

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Oversight panels suggests GMAC break up, merger with GM

03/11/2010, 6:12 PMBY DREW JOHNSON

While General Motors appears to be getting its act together, the automaker’s preferred lending arm – GMAC – continues to be a black hole for government bailouts. GMAC has received $17.2 billion in government funding, but has yet to develop a viable business plan for the future.

Due to that lack of direction, the Congressional Oversight Panel – charged with overseeing the government’s Troubled Asset Relief Program funds – has suggested that GMAC be broken up and merged back with GM. GMAC was spun off from GM in 2006.

Moreover, the Congressional Oversight Panel has expressed concerns that the Treasury Department hasn’t been steadfast in holding GMAC to a viable business plan, putting billions in taxpayer funds in jeopardy.

“The panel is deeply concerned that Treasury has not required GMAC to lay out a clear path to viability or a strategy for fully repaying taxpayers,” said the Congressional Oversight Panel.

GMAC countered the panel’s thoughts in a released statement, saying: “We appreciate the panel’s responsibility to analyze history; however, GMAC’s management team is focused on the future.”

GMAC lost $10 billion last year, $8.3 billion of which was related to the company’s mortgage business.



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