Wednesday, February 27, 2008

G.M. Voices Confidence in Lending Business

Despite big losses at the auto and mortgage lender GMAC, General Motors is confident that its partner, the private equity firm Cerberus Capital Management, can fix the troubled financing business.
G.M.'s chief financial officer, Frederick A. Henderson, said Tuesday that the automaker still expected GMAC to be profitable and saw no need to inject additional cash into the unit.
Moreover, Mr. Henderson said that G.M. had no interest in severing its relationship with Cerberus, which acquired 51 percent of GMAC in 2006.
"We're not considering that today, nor would we," he said in an interview. "The conditions are not right."
His comments came partly in response to a widely publicized letter from Cerberus to its investors last month that expressed "significant concerns" about GMAC. In the letter, the chairman of Cerberus, Stephen A. Feinberg, said the firm's stake in GMAC represented a "significant risk" and warned that "things could get a lot worse."©NYT

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