Mulally to GMAC: Start acting like a bank
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Mulally to GMAC: Start acting like a bank
http://www.detnews.com/article/20090...ng+like+a+bank
Dearborn -- Ford Motor Co. CEO Alan Mulally called on GMAC to start acting like the bank holding company it has become, saying its first obligation should be to shareholders -- not General Motors Co. and Chrysler Group LLC.
GMAC, which received government approval to become a bank holding company earlier this year, is the primary lender for GM and Chrysler. Mulally said Ford "is not being disadvantaged" by GMAC's status, but said government approval of Ford's application to form an industrial bank would help.
On Sunday, Sen. Mitch McConnell, R-Ky., said on "Meet the Press" that Mulally called him recently to talk about the loan application.
McConnell said that Mulally told him that Ford was "doing reasonably well compared to everybody else in this recession. People appreciate the fact that we haven't taken any money from the government. But we've got a problem. The government now runs the finance companies of GM and Chrysler. And since they're running the finance companies, they're undercutting us on the financing of our automobiles."
GMAC, which received government approval to become a bank holding company earlier this year, is the primary lender for GM and Chrysler. Mulally said Ford "is not being disadvantaged" by GMAC's status, but said government approval of Ford's application to form an industrial bank would help.
On Sunday, Sen. Mitch McConnell, R-Ky., said on "Meet the Press" that Mulally called him recently to talk about the loan application.
McConnell said that Mulally told him that Ford was "doing reasonably well compared to everybody else in this recession. People appreciate the fact that we haven't taken any money from the government. But we've got a problem. The government now runs the finance companies of GM and Chrysler. And since they're running the finance companies, they're undercutting us on the financing of our automobiles."
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Every company's first obligation should be to provide its customers with the intended product/service in a reasonable manner, at a reasonable price considering the quality and efficiency with which that product/service is delivered. The shareholders should benefit as a byproduct of the company doing a good job.
Catering directly to the shareholders is a recipe for disaster in the long term.
Catering directly to the shareholders is a recipe for disaster in the long term.
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