He is also planning to sell off a large stake in the company's profitable finance subsidiary, General Motors Acceptance Corp. Trying to predict his remaining options has become something of a parlour game in Detroit circles.
Meanwhile, General Motors, already reeling from a 28 percent plunge in the pace of auto and truck sales, now confronts the fact that it won't get any help this time from GMAC, its once highly profitable finance arm, which is reeling from an increase in delinquencies on home and auto loans.
He is reportedly angling for a seat on the GM board for one of his own lieutenants, Jerry York, a former Chrysler executive.Along with factory cutbacks, Mr Wagoner is planning to sell off a large stake in the company's profitable finance subsidiary, General Motors Acceptance Corp. Trying to predict his remaining options has become something of a parlour game in Detroit circles.
It is planning to sell a slice of its profitable finance business, GMAC, and has flogged at a loss its stake in a Japanese carmaker, Fuji's Subaru, to Toyota the nemesis that looks set soon to snatch its crown as the world's biggest car firm.
Here are some of those knowable facts: –Ford has $25 billion dollars in the bank versus debts of only $18 billion; –It earned $2 billion worldwide last year despite huge losses in the U.S. market; –Ford's balance sheet still sports $13.9 billion of shareholder equity; –It owns one of the largest, most profitable finance companies in the world.
Even if the new industries take off, they are unlikely to prove as profitable as finance.In the meantime their finance-promoting groups, Jersey Finance and Guernsey Finance, are trying to draw assets from new countries, and are setting up offices in markets like China and the Gulf.
As Andrew Haldane of the Bank of England has pointed out, banking activities themselves are no golden goose: once you take into account leverage, there is nothing particularly profitable about finance.
On Apr. 3, General Motors announced that it would get about $14 billion over the next three years for selling a 51percentt stake of its highly profitable GMAC finance division to a group led by Feinberg's firm, Cerberus Capital Management.
