GMAC Posts Record $2.52 Billion Loss - Chapter 11 Forecast For Some Divisions

GMAC LLC, the financing arm of General Motors Corp. gripped by a cash squeeze, posted its fifth straight quarterly loss and said its mortgage unit may not survive.

The third-quarter net loss widened to a record $2.52 billion from $1.6 billion a year earlier, the Detroit-based company said in a statement today. Total net revenue declined 43 percent to $1.72 billion. The Residential Capital home-loan unit lost $1.9 billion during the quarter, while GMAC's auto finance unit lost $294 million.

GMAC's results were crushed by slumps in the housing market, where foreclosures are running at record levels, and in auto sales, which GM labeled the worst since 1945 when it reported October results this week. ResCap has posted losses totaling $4.6 billion so far this year.

Without additional support from GMAC, ``substantial doubt exists regarding ResCap's ability to continue as a going concern,'' GMAC said in today's statement.


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0to60 - 11/5/2008 2:34:53 PM

+3 Boost

u find that funny. I am afraid for this countries financial sake. Sad.

stevenv1999 - 11/5/2008 3:01:06 PM

+2 Boost

I am not afraid for the American auto industry, but I am for our economy. I still think of Ross Perot back in '78 telling the GM board that they are building junk and to come down from the white tower and go down and see for themselves. Their answer was to buy him out for 750 million. That was 30 years ago when companies like GM were still profitible and their biggest stock holder tried to help and warn them that a 1% loss every year would begin to add up if they didn't change. Well, now GM, like alot of complacent American car manufacturers are on the verge of bankruptsy and so it does not surprise me the level of apathy has brought them to this. The sad part is how many American's have lost their jobs because of it. My, how the mighty have fallen. Sad really.

Agent009 - 11/5/2008 4:38:04 PM

+2 Boost

I remember those years. Perot was a visionary, and GM was keeping it's head in the ground.

They were warned and failed to heed to the call.

woood - 11/5/2008 10:28:37 PM

0 Boost

IMO, GM is no different from the banks who lent and lent and lent because of greed. Gm just sat back and relaxed when times were good while other carmakers persisted on improving their operations and products. US gov. can't possible consider bailing GM out without any clear cut plan presented on how to return their money.

no1listensanyway - 11/6/2008 11:00:58 PM

+1 Boost

If they go out of business, do I still have to pay my lease?