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Added by Steve Taylor on November 30, 2008 at 8:03pm —
Treasury Secretary Henry Paulson Jr. announced a plan this morning that calls for the Treasury and the Federal Reserve to create a facility to finance issuance of non-mortgage asset-backed paper. The program is meant to get liquidity flowing back into the auto loan, student loan, and credit card markets.
The asset-backed market “essentially came to a halt in October,” Paulson said. “As a result, millions of Americans cannot find affordable financing for their basic credit needs,” he… Continue
Added by Marcie Belles on November 25, 2008 at 12:30pm —
• AmeriCredit Corp. is canceling its senior notes, instead issuing 15.1 million shares to shareholder Fairholme Funds Inc.
Fairholme currently holds a 19.8% stake in the Fort Worth, Texas-based lender.
to read more about the arrangement.
• Standard & Poor’s issued a statement today on its downgrade of Ford Motor Co. S&P lowered Ford’ rating on Friday to… Continue
Added by Marcie Belles on November 24, 2008 at 3:08pm —
The auto lending shakeout is worsening as the pace of financier closings and curtailments quickens.
In the past week, newbie lender Sixth Gear Solutions Corp. shut down for lack of funds. Wells Fargo & Co. halted Canadian operations
, and Citigroup has severely reduced originations.
In some ways, the crisis our sector is facing is similar to the mortgage meltdown that started two… Continue
Added by Marcie Belles on November 21, 2008 at 11:00am —
Even though sales are down by as much at 30%, don't look for any
of the super-luxury carmakers to begin offering incentives.
Rather than diminish the perceived value of their vehicles by offering incentives, manufacturers like Bentley, Maserati, and Lamborghini are instead going to wait out the economic downturn. Efforts to improve sales in the U.S. are focused on introducing new… Continue
Added by Mike Gibb on November 21, 2008 at 9:16am —
A handful of bipartisan senators are scurrying to hammer out a bill that would reallocate funds from an initial $25 billion loan to the Big Three automakers in the hopes of keeping the companies afloat.
The initial loan, granted last month, was meant to be used to retool factories to produce more fuel-efficient vehicles.
During the past two days of hearings, Congress appeared disinclined to grant a second $25 billion loan to the Big Three. Lawmakers sought assurances from… Continue
Added by Marcie Belles on November 20, 2008 at 1:18pm —
Like anything in life, if you are not allowed to fail you can never truly succeed. My own successes in life are built on the many lessons I have learned and the understandings I have gleaned from the times I’ve failed. So true is this simple fact of life, that it translates to simple economics. If an individual business or industry is to succeed, they must be allowed to fail. Business entities and industries in a truly free marketplace use the lessons of failure to build a more competitive… Continue
Added by Greg Thibodeau on November 20, 2008 at 10:34am —
GMAC Financial Services today announced that it has submitted an application to the Federal Reserve for approval to become a bank holding company. GMAC also said today that it submitted an application to the U.S. Treasury for TARP funds.
* GMAC's announcement here
* AP coverage here
Added by JJ Hornblass on November 20, 2008 at 9:51am —
Note I've just joined the forum so what follows may be redundant ... I've not searched for what others have said on the topic. Yet. The following was posted as a comment to Marcie Belles, and I'm reposting here.
Anyway, I'm working with my university's communications people right now to try to put together an audio portion, a news release and then work on op-eds and the like. Once I know a web link (later today!), I'll put it here. I've also exchanged many emails with a forum member,… Continue
Added by Michael Smitka on November 19, 2008 at 12:06pm —
Members of the House Financial Services Committee continue to grill the CEOs of the Big Three auto manufacturers about their request for a second $25 billion loan.
So far, Richard Wagoner from General Motors Corp., Alan Mullally of Ford Motor Co., and Robert Nardelli of Chrysler have been pressed to discuss their plans for the funding, the expected outcome if the loan isn’t granted, and whether the automakers would allocate some funds to dealer floorplans, among other… Continue
Added by Marcie Belles on November 19, 2008 at 11:55am —
As it battles plunging earnings, Citigroup Inc. announced today that it would slash headcount by 50,000 and reduce expenses by 20% in the near term. It’s unclear what those moves will mean for CitiFinancial Auto, the bank’s auto unit.
Since being rumored for sale late last year, CitiFinancial Auto has instituted measures meant to streamline operations and cut costs. Earlier this year, the unit fired at least 20% of its workforce, closed half of its 140 loan-production offices, and… Continue
Added by Marcie Belles on November 17, 2008 at 12:30pm —
Despite losing $84 million on automotive leases last quarter, US Bancorp remains committed to the auto financing business, its top executive said yesterday.
Richard K. Davis, the chairman, president and CEO of US Bancorp, emphasized during a presentation on the company's performance and plans that auto finance remains in the bank's strategy.
"We have been in the auto finance business since 1953 and we are going to stay active," Davis said.
The reaffirmation… Continue
Added by JJ Hornblass on November 13, 2008 at 11:00am —
In a notable admission, Richard Fairbanks, the chairman and CEO of Capital One Financial Corp., yesterday acknowledged that the company made notable mistakes in automotive finance.
Fairbanks called Cap One's financial modeling when its auto finance unit moved beyond the super-prime and prime sectors a couple of years ago as "among the worst in the market." Fairbanks said Capital One made the mistakes as it "expanded to parts of the business we hadn't been in before."
Added by JJ Hornblass on November 13, 2008 at 10:30am —
Score one for auto finance.
The good news: Treasury Secretary Henry Paulson announced today that rather than buying up distressed mortgage assets from Wall Street firms, the government will instead provide direct injections of capital to troubled firms. The better news: Nonbank financial institutions, including auto financiers, credit card firms, and student lenders, may qualify for funding.
“Illiquidity in this sector is raising the cost and reducing the availability of… Continue
Added by Marcie Belles on November 12, 2008 at 12:44pm —
With sadness, we regret to inform you of the untimely passing of Brent Smith, an esteemed member of the AutoFinanceNews.net community and the industry at large.
Brent, vice president of client development for Ascension Capital Group, died Sunday, Nov. 9, as a result of injuries sustained from a vehicle accident the prior evening. He was 35.
Before joining Ascension in 2006, Brent spent a decade at ADP TotalSource. He graduated from North Texas University.
Added by Marcie Belles on November 12, 2008 at 11:30am —
GM and Ford are once again begging at the doorstep of every honest, tax-paying American. Just two months ago, Congress gave the Detroit Three $25 billion dollars worth of bailout money, and now they want more. They say this time it’s different; this time, with only $50 billion, they can become profitable. The worst part is GM’s argument for the bailout: they say if the taxpayers don’t bail them out, it’ll spell horrible doom for the economy.
Now, I could go off on an economics lesson… Continue
Added by Joe the Consultant on November 11, 2008 at 9:32am —
The Federal Reserve Monday approved American Express Co.’s bid to become a bank holding company, a status that GMAC LLC is actively pursuing in an effort to tap emergency government funding.
The Fed fast-tracked AmEx’s request, waiving the normal 30-day waiting period for the application.
“In light of the unusual and exigent circumstances affecting the financial markets, and all other facts and circumstances, the [Federal Reserve] Board has determined that emergency… Continue
Added by Marcie Belles on November 11, 2008 at 12:26am —
General Motors Corp. reported third-quarter earnings today: a whopping $4.2 billion, or $7.35 per share, excluding special items. But the beleaguered auto manufacturer dropped a bombshell when it disclosed its cash position, which is dangerously low.
The company said its "estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business."
To make matters worse, the company said that in the first half of next year its… Continue
Added by Marcie Belles on November 7, 2008 at 11:57am —
The auto industry is taking on water fast. Here are some headlines from the past few days:
• Ford announces $129 million 3Q loss, burns $7.7 billion in cash
• AutoNation posts $1.41 billion loss
• Toyota feeling 8-year low as profits plunge
• S&P cuts Nissan outlook to negative
• Carmakers to talk funding with Pelosi
• Lithia Motors sells three more stores
• Tough year for autos hits Nicholas Financial’s bottom line
• GMAC has $2.52 billion… Continue
Added by Marcie Belles on November 7, 2008 at 11:43am —
Castel Inc. had Carfinco Income Fund at hello. Well, almost.
Carfinco Income Fund, Canada’s specialty auto finance fund, has purchased a dialer solution from Castel Inc. Prior to this contract, Carfinco relied on manual dialing.
Carfinco and Castel held their initial negotiations at last spring’s Auto Finance Risk Summit. The Auto Finance Risk Summit is presented by Auto Finance News and AutoFinanceNews.net.
Troy Graf, Carfinco’s chief financial officer, said… Continue
Added by Mary Wisniewski on November 6, 2008 at 10:09am —