Good news: GM may divest of GMAC as part of deal to merge with Chrysler

According to an article in The Wall Street Journal cited by an Associated Press article by Tom Krisher entitled "Chrysler, GM discuss merger, acquisition", GM is contemplating a deal to acquire Chrysler that might involve shedding GMAC. That would be great news, allowing GM to focus on retooling of manufacturing for new hybrid vehicles rather than being distracted by anxiety over consumer financing in GMAC that is also exposed to residential mortgages. The odds of a deal are rated at 50-50, but I suspect the pressure on GM will only increase in the coming days.

If the deal does go through, the next step that is needed is for private equity firm Cerberus, current owner of Chrysler and a 51% stake in GMAC, to turn GMAC into a true bank holding company and participate in Treasury efforts to shed "toxic" assets. The net result would be a very interesting new financial institution.

Then, what we need is for GE to do the same thing with GE Capital. GE really needs to focus on industrial infrastructure operations rather than being distracted by an in-house "bank." Maybe Cerberus can help out here as well.

-- Jack Krupansky