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Heard on the news here today that GMAC is moving down to Charlotte, NC. The county gave them $220,000 over three years in incentives to relocate here. Most of you all probably knew that they were planning this move, but today was the first official word that I heard on it.
Not surprising at all, considering the three headed monster that rolled into town.
GMAC reports these figures as of December, 2007:
* Employees = 26,700
* Revenues = $31.5 billion
* Total Assets = $248 billion
* Customers = 15 million
* Operations in 40 countries
* The 4th largest private company by revenues in the U.S.
The majority owner of GMAC, private equity firm Cerberus, also is the majority
owner of troubled Chrysler.
Attachment 541
I was honestly hoping the someone at GMAC with their head screwed on straight would decide to stay in Detroit. There is really no reason for them to come down here. Isn't their primary business financing for car purchases?
Obviously a victim of he mortgage fiasco, but why the expense of a major move now ?
http://blogs.wsj.com/deals/2008/12/2...eal-from-hell/Quote:
GM sold 50.1% of GMAC to a Cerberus-led consortium in April 2006 for $7.4 billion, with the expectation of receiving another $7 billion over the next three years. the sale was motivated by the desire to avoid having the lender’s investment-grade credit rating tarnished by the poor credit rating of the auto maker.
And how did that work out? By this June, GMAC’s credit rating had fallen six full notches below investment grade, largely because of troubles at its home-loan arm, Residential Capital.
It seems clear now that Cerberus’s acquisition of 50.1% of GMAC now qualifies as a Deal from Hell, a mantle inspired by Robert Bruner, dean of the Darden School of Business at the University of Virginia, and his book, “Deals From Hell: M&A Lessons That Rise Above the Ashes.” Bruner’s requirements for consideration included destruction of market value; financial instability; impaired strategic position; organizational weakness; damaged reputation; or violation of ethical norms and laws.
Destruction of market value? Well this month, Deutsche Bank analyst Rod Lache put a price target of $0 on all of GM, which would include the auto maker’s stake in GMAC. And the reasons behind the conversion to bank-holding company status speak to the other criteria [[excluding violation of ethics or laws, of course).
GMAC was hit by three forces in the past two years: the crash in home prices that hit ResCap; the slowdown of the auto industry; and the credit crunch. It all has combined to create a nightmare that probably won’t end quickly, even with government funds. GMAC is still in the midst of a highly contested $38 billion debt exchange offer. And even if that gets done by Saturday’s deadline, there are further problems.
is there a typo in the O.P.? $220,000 in incentives doesn't seem like a lot to move a multi billion dollar organization.
Cause their only moving 200 jobs. Auto financing stays here
http://investing.businessweek.com/re...BAC&symbol=BAC
With some of the above figures involved, doesn't it seem like an executive just got tired of calling a contractor to shovel his snow ? :mad:Quote:
The county gave them $220,000 over three years in incentives to relocate here.
GMAC has already said that they aren't moving the HQ from Detroit, but they are just expanding operations in Charlotte. I don't think that has changed since yesterday.
Actually, in order for GMAC to qualify for TARP funds in Dec. 2008, GM agreed to reduce their stake from 49% to less than 10% and Cerberus from 51% to 33%. I'm not sure who agreed to buy those stakes.Quote:
Originally Posted by Bigb23