GMAC, General Motors' finance division was bailed out to the tune of billions just three years ago, along with GM and Chrysler. Renamed Ally Financial, this financing arm was used once again to practically give away GM and Chrysler cars with no interest financing. All of this came from the largesse of the Governments of the US and Canada, and the resulting bill has been sent to the taxpayers, as has become the norm as a result of the Financial Crisis. Bailouts are nothing more than money taken out of the pockets of taxpayers, even if the bill will come due in the future, and handed over to mega wealthy corporations, or more appropriately to the top Executives of these corporations, who pay themselves millions while bankrupting the bailed out corporation so it can come right back begging for more handouts. This seems to be the case with that which was formerly GMAC and is now ALLY Financial. Ally is once again teetering on the brink of bankruptcy as GMAC was only 3 years ago.
(Reuters) - In the fall of 2009, the board of GMAC, one of the largest U.S. auto and home-loan companies, gathered in New York to discuss whether to put its troubled mortgage unit into bankruptcy.
GMAC, now called Ally Financial, was just about to receive the last of $17 billion in taxpayer bailouts. The board, including directors named by the government, discussed whether to use bankruptcy to get rid of toxic mortgage assets that were pulling down the rest of the company, according to people who attended the meeting.
Alvaro de Molina, GMAC's CEO at the time, disagreed. The move, he said, would lead to years of fights with creditors and tough treatment from regulators that would hurt the company. De Molina prevailed, but the board lost confidence in the CEO and replaced him soon after with Michael Carpenter, an Ally director and former Citigroup Inc executive, these sources said.
Today, Residential Capital (ResCap) - Ally's mortgage servicing and lending unit that turned from being a profit engine to a lemon - is again on the verge of being put into bankruptcy, possibly within a week, according to sources with direct knowledge of the situation.