GM Ramps Up Risky Subprime Auto Loans To Drive Sales

  • Posted by a hidden member.
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    Jul 29, 2012 12:28 AM GMT
    Seems somewhat unwise and ironic considering...

    http://news.investors.com/article/620090/201207271807/gm-risky-subprime-auto-loans-fuel-sales.htm

    President Obama has touted General Motors (GM) as a successful example of his administration's policies. Yet GM's recovery is built, at least in part, on the increasing use of subprime loans.

    The Obama administration in 2009 bailed out GM to the tune of $50 billion as it went into a managed bankruptcy.

    Near the end of 2010, GM acquired a new captive lending arm, subprime specialist AmeriCredit. Renamed GM Financial, it has played a significant role in GM's growth .

    The automaker is relying increasingly on subprime loans, 10-Q financial reports shows.

    Potential borrowers of car loans are rated on FICO scores that range from 300 to 850. Anything under 660 is generally deemed subprime.
  • musclmed

    Posts: 3287

    Jul 29, 2012 12:53 AM GMT
    riddler78 saidSeems somewhat unwise and ironic considering...

    http://news.investors.com/article/620090/201207271807/gm-risky-subprime-auto-loans-fuel-sales.htm

    President Obama has touted General Motors (GM) as a successful example of his administration's policies. Yet GM's recovery is built, at least in part, on the increasing use of subprime loans.

    The Obama administration in 2009 bailed out GM to the tune of $50 billion as it went into a managed bankruptcy.

    Near the end of 2010, GM acquired a new captive lending arm, subprime specialist AmeriCredit. Renamed GM Financial, it has played a significant role in GM's growth .

    The automaker is relying increasingly on subprime loans, 10-Q financial reports shows.

    Potential borrowers of car loans are rated on FICO scores that range from 300 to 850. Anything under 660 is generally deemed subprime.



    Ally bank is formerly GMAC is also still doing risky things. They have higher interest rates for CD's and neato commercials.

    But they also have alot of baggage. A good bank doesn't need to advertise.

    http://www.depositaccounts.com/blog/2012/05/ally-financial-mortgage-units-bankruptcy-and-its-impact-to-ally-bank.html
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    Jul 29, 2012 5:50 AM GMT
    musclmed said
    riddler78 saidSeems somewhat unwise and ironic considering...

    http://news.investors.com/article/620090/201207271807/gm-risky-subprime-auto-loans-fuel-sales.htm

    President Obama has touted General Motors (GM) as a successful example of his administration's policies. Yet GM's recovery is built, at least in part, on the increasing use of subprime loans.

    The Obama administration in 2009 bailed out GM to the tune of $50 billion as it went into a managed bankruptcy.

    Near the end of 2010, GM acquired a new captive lending arm, subprime specialist AmeriCredit. Renamed GM Financial, it has played a significant role in GM's growth .

    The automaker is relying increasingly on subprime loans, 10-Q financial reports shows.

    Potential borrowers of car loans are rated on FICO scores that range from 300 to 850. Anything under 660 is generally deemed subprime.



    Ally bank is formerly GMAC is also still doing risky things. They have higher interest rates for CD's and neato commercials.

    But they also have alot of baggage. A good bank doesn't need to advertise.

    http://www.depositaccounts.com/blog/2012/05/ally-financial-mortgage-units-bankruptcy-and-its-impact-to-ally-bank.html


    It would seem they are trying to prop up GM until at least the election given how disastrous it could ultimately end up given that they never really dealt with the underlying issues that brought them to the brink in the first place. It's also not as if any of this wasn't previously predictable either.
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    Jul 30, 2012 10:32 PM GMT
    Ouch.

    http://jalopnik.com/5930224/did-600-million-man-u-soccer-jerseys-get-a-gm-executive-fired

    Yesterday, General Motors fired its chief marketing officer, Joel Ewanick, saying he failed to live up to the company's "expectations." Those expectations seem to be related to GM's recent deal to sponsor Manchester United, the world's richest sports team.
    Today, GM announced a deal to put Chevrolet's name on Man U jerseys, starting in 2014. The value was "undisclosed" but Reuters says the seven-year agreement is worth nearly $600 million, or $60 million to $70 million a year.

    That's more than double what Aon, the insurance company, is currently paying per year to put its name on the jerseys. A person with knowledge of the deal tells Reuters that GM will also pay a $100 million activation fee for the jersey-naming deal, which wasn't part of GM's original agreement with Man U six weeks ago.

    All GM got in that deal was the right to call itself Man U's global automotive partner, plus some perks like putting its name on the sidelines. But jerseys are the real deal, because they're seen in every shot of every game.
  • Posted by a hidden member.
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    Jul 31, 2012 4:44 PM GMT
    What actually needs to happen is Lt Dan (Akerson) to be given the boot especially after the incident with Joel Ewanick over the weekend.