water, as its net losses reached $2.5bn (€2bn) in Q3, raising
doubts that units of the company can continue to survive without
financial help from the US government.
The finance arm of Detroit-based automaker General Motors said
the huge loss for the third quarter, sharply increased from the net
loss of $1.6bn in same period one year ago, were primarily
attributable to “adverse market conditions domestically and
internationally” within its mortgage and vehicle financing
businesses.
Go deeper with GlobalData
GMAC’s global automotive finance arm reported losses for $294
million because of lower used vehicle prices and a weaker consumer
and dealer credit performance.
Overall, financial originations decreased to $11.3bn of retail
and lease contracts, forcing the company to take drastic actions
which have already included ceasing originations in seven European
countries.
The biggest losses, at $1.9bn, were reported in Residential
Capital, which the company said is at risk of survival without
support.
GMAC has recently applied to become a bank holding company,
which would allow it to obtain federal bail-out funds.
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By GlobalDataGMAC is 49 percent owned by GM, while Cerberus Capital
Management leads a group which owns 51 percent of the company.
GM, which has warned it could run out of cash by early next
year, has also ended talks on a possible merger with car maker
Chrysler, saying its primary objective now is to focus on
its liquidity situation.
