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SENTRY JOURNAL » AmeriCredit, bailout, Congress, GM, Subprime Loans » Government Motors buys subprime auto lender for $3.5 billion

Government Motors buys subprime auto lender for $3.5 billion

A few days ago it was reported that GM has agreed to pay $3.5 billion for subprime auto lender AmeriCredit.  GM sees this as an opportunity to move more of their cars by loaning money to consumers with less than perfect credit.  This is their master plan to emerge from a taxpayer bailout that cost us $50 billion. Yes that’s right you and I own 61 percent of this mess and with this brilliant plan it doesn’t look like we’ll be getting our money back anytime soon.  Is this for real?  Can the leadership running GM be this dumb?  Didn’t they learn anything from the housing subprime mortgage crisis and also the failure of their own finance arm GMAC?  I mean is this company stuck on stupid?
The clear as crystal answer is yes.

“This acquisition supports our efforts to design, build and sell the world’s best vehicles by expanding the financing options we can offer to consumers who want to buy GM vehicles,” Whitacre said. “Adding AmeriCredit to our team will improve our competitiveness in auto financing offerings.”

Back in 2006 GM sold the majority of stake in their finance arm GMAC “partly because GM’s junk bond rating from credit agencies made it expensive for the finance firm to raise necessary capital.”  GMAC was not only the main source that provided vehicle loans for the auto giant, they were also a major subprime mortgage lender. “GMAC’s problems with both auto finance and subprime mortgages ended up necessitating its own $17 billion bailout from the Treasury.”

They have walked this ruinous path before and because GM was not allowed fail because of their poor business decisions, the taxpayers are now holding the bag again as GM uses our money to walk down this path again.  What is the definition of insanity?  Oh I remember; doing the same thing over and over again expecting different results.

I have one question for our congress.  Why would you allow a company that you propped up with fake money to commit the same irresponsible actions that got them into this mess to begin with?  Get back with me on that one when you take a break from destroying our Republic.  I won’t hold my breath waiting for an answer.

Liberty forever, freedom for all!

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Filed under: AmeriCredit, bailout, Congress, GM, Subprime Loans

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Comments
  • Randy-g July 24, 2010 at 5:19 AM

    The Government auto task force is where this is coming from…..

  • John Carey July 24, 2010 at 7:00 AM

    I must say Randy no matter where it is coming from it's a bonehead move.

  • Trestin July 24, 2010 at 8:08 AM

    Things like this have lead me to decide to never buy a GM, and recommend no one else does. It's like using a shotgun to heal a bad cut.

  • John Carey July 24, 2010 at 10:52 AM

    I know what you mean Trestin. It's easy for me because I have always been a Ford guy. I was very proud of them during the whole bailout fiasco.

  • Matt July 24, 2010 at 11:57 AM

    I was a loyal GM guy, until the bailout. It's Ford for me now. My Pontiac will be the last GM product I will ever buy.

    This is really the typical liberal response to anything. Sub-prime loans called the housing crisis, and the resulting depression. Instead of stepping back and saying, "Gee that didn't work out at all, let's not do that anymore," they go full steam ahead to do even more of it!

    You can apply this to almost any failed liberal project. They usually explain it by saying that they didn't do enough of it in the first place.

  • Randy-g July 24, 2010 at 4:01 PM

    My employment has big GM connections, sometimes I hate to admit to it. I wished GM would have filed bankruptcy and started from scratch, without ever getting in bed with the Government. Ford is a much better company for not sleeping with the enemy…..

  • The Born Again American July 24, 2010 at 4:06 PM

    What I'm about to say will no doubt be taken as racist, but it came from a black comedian by the name of Slappy White… (no punn intended) Back in the sixties (you know, the Ed Sullivan Show)he use to do a stand up routine in which he proclaimed the "Black" holidays, Abraham Lincoln's birthday, George Washington Carver's birthday and Octobber 12th, that being the day the new Cadilacs came out… He followed that up with, "we may not keep them long, but we get them first"…

    That was a long way to go to prove the point, that this will be just like what happened to the housing market… It is not an unalienable right to own a house any more than it is a right to own a car… I can hear Chris Dodd now, if you put restrictions on car buying, only people that can afford them will be able to drive…

  • John Carey July 24, 2010 at 5:42 PM

    I agree Matt that this is the same liberal repsonse, like I said the deinition of insanity is doing the same thing over and over and expecting different results. Thanks for the comments.

  • John Carey July 24, 2010 at 5:47 PM

    They could have busted those GM killing union contracts if they were allowed to file for bankruptcy and reorganize Randy. The company would have been far better off today. But team Obama had to protect the unions and decide that GM was too big to fail. So they bailed them out.

  • John Carey July 24, 2010 at 5:48 PM

    Well said BO!

  • Harrison July 26, 2010 at 6:48 PM

    GM sunk themselves into deep water with so many bad loans. Not only that but those 0% loans killed the resale value of their cars. Another disaster waiting to happen.

  • John Carey July 26, 2010 at 7:01 PM

    Thanks for dropping by Harrison. They have not learned their lesson. This is simply outrageous.