One of my co-worker's brother is a GMAC employee who's in town for the derby and we all went out to lunch today. It was interesting to hear what a guy who works there had to say.

Anyways, contrary to what I've read several places, he did say that GM's junk bond status was killing them and it was getting too expensive to lend money. Basically GM needed to get out or it would have bled GMAC to death. After this sale goes though GMAC should have an investment grade rating.

Also he said all the employees there are excited about it because they're very hopeful this will help their business. So in reality, eventhough GM still owns 49% (a fact that most articles dont like the point out, concentrating on the fact that GM sold a money-maker), they still made $14bil off the sale, get half the profits and GMAC will be able to lend more money, so GM's healthy 49% wont be as bad as it sounds (again echoing Lutz's comments about being a healthy #2 instead of a struggling #1).

He reminded me that GM has a buy-back option for GMAC in 10 years (I did read that) so if they can get turned around then GM can buy the cow back.

Just another perspective.

 

Yep. Pretty much exactly what I said back when it was announced. Some people didn't want to see it that way though.

 

You mean the realisitic one?

Shhhh.... you'll rain on the Doom & Gloom parade.

 

I kinda assume that the plan is to eventually buy it back.
Sure, it'll cost a couple B more to buy it back probably, but I think this move was in the best interest of both sides for the time being.

 

Being a GMAC employee myself, I can tell you that all of my superiors are pretty excited about the sale. This will allow our company to grow alot, and will give GM more flexibility. Beneficial for all sides.