The CEO of General Motors (GM), Dean Akerson, is interested in buying at least some assets of the ailing Ally Financial (ALLY-PA). Akerson told Bloomberg reporters that he would like to buy Ally’s operations in Europe, Canada, Mexico, and South America. Akerson said GM probably is not interested in buying any of Ally’s U.S. operations. He said those assets are not attractive because Ally’s U.S. lending operation has been turned over to Wells Fargo (WFC) in the Western U.S. That probably means that adding such financing would not help GM’s sales in the Western U.S.
GM wants Ally’s Canadian, European, and Latin American operations in ordering to expand its financing infrastructure, Akerson seemed to indicate. He did not say what exactly General Motors plans to do with that infrastructure, only that he seems to think it would benefit the company. Interestingly enough, such an acquisition would simply take back assets that a previous management team at GM sold off in 2006. Ally Financial used to be General Motors Acceptance Corporation, or GMAC, which pioneered automobile finance in the United States. GM sold 51% of GMAC to Cerberus Capital Management LP, the hedge fund that used to own Chrysler.
The effect of this vague talk on GM stock prices might not be very good. Ally Financial’s capital has been in trouble lately because of losses at its privately held mortgage REIT, ResCap. ResCap has had to file for bankruptcy reorganization because of its problems.To continue reading, click here.