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.
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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.
