Marcie Belles's Blog – November 2008 Archive (13)

Paulson Unveils Plan to Jumpstart Lending

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 — No Comments

More Bad News

• 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.

Click here 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 — No Comments

Eclipsing the Mortgage Meltdown

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 — No Comments

Senators Compromise for Big Three Bailout

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 — No Comments

Big Three CEOs Face Off Against Congress

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 — 3 Comments

How Will CitiFinancial Auto Fare?

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 — 6 Comments

Paulson Revamps Rescue Plan to Include Auto Lenders

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 — No Comments

In Memoriam: Brent Smith

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.

Brent… Continue

Added by Marcie Belles on November 12, 2008 at 11:30am — 1 Comment

Will GMAC Be Next for Bank Holding Co. Nod?

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 — No Comments

GM's S.O.S.

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 — 9 Comments

The Auto Finance Floodgates Are Opening

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 — 3 Comments

The (Not So) Shortlist for Obama's Cabinet

Despite Barack Obama's election as president of the United States yesterday, the financial services sector remains in a perilous state, and that makes his cabinet choices all the more important.

We've gone deep into blog land to tally the names of prospective nominees for Obama's banking-related cabinet positions.

But before we do that, we agree with some commentators who say Obama should rush to name his Treasury secretary and Council of Economic Advisors chairman so that… Continue

Added by Marcie Belles on November 5, 2008 at 10:36am — No Comments

October Sales Land With a Thud

Vehicle sales tanked last month, as U.S. consumers tangled with tighter credit guidelines and heightening economic distress.

Here’s a rundown of automakers’ October year-over-year volume declines:

GM: -45%
Nissan: -33%
Ford: -30%
Mazda: -29%
Honda: -25%
Toyota: -23%

Overall volume fell for the 12th straight month, extending the longest slide in 17 years. Annualized, the sales rate was 11.5 million, compared with 16.1 million in 2007.

Added by Marcie Belles on November 3, 2008 at 2:30pm — 3 Comments