Feds Pump $3.8 Billion More Into GMAC

The U.S. Treasury Department invested another $3.8 billion in the financial company GMAC, bringing its total commitment to $17.2 billion. This raises Treasury’s ownership stake to 56.3% (up from 35.4%), making taxpayers the majority stakeholder in the company.

This also brings the government’s total investment in the domestic auto industry to $85 billion of bailout money from the TARP fund.

GMAC is the primary lender to Chrysler and GM, so if the government wants to protect its investment in those two companies, the health of GMAC is more or less essential. Much of the money will be used to shore up the mortgage unit, ResCap, which has lost a good deal of money in the housing crash. GMAC lost $5.3 billion in the first nine months of this year.

With the investment, Treasury now has the right to appoint four of the nine directors to the GMAC board.

Cash Infusion Makes U.S. Majority Owner of GMAC (Detroit News)