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US Treasury Taps Former Chrysler Exec in Bid to Save Ally Financial

Gerry Greenwald to serve as new director of troubled lender.

by on Aug.16, 2012

Former Chrysler Vice Chairman Gerry Greenwald.

He played a critical role in saving Chrysler three decades ago, and now the U.S. Treasury is hoping one of the maker’s top former executives can work the same magic at struggling Ally Financial, one of the companies bailed out by the government in 2009.

A turnaround is more than academic for taxpayers.  The Treasury still owns a 70% stake in Ally, formerly known as General Motors Acceptance Corp.  The firm continues trying to dig out from the financial crisis of 2008 and a disastrous foray into the mortgage business.

Ally said Gerald Greenwald, former chairman and chief executive officer of United Airlines and vice chairman of Chrysler Corp., will join its board along with Henry S. Miller, an experienced private equity executive.  Both were nominated by the Treasury Department.

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“Gerald and Henry are valued additions to the Ally board,” said Ally Chairman Franklin Hobbs. “They bring extensive experience from both the financial and auto sectors and will add key perspectives as Ally continues its transformation. We are pleased to have these two seasoned leaders join the board.”


Ally Tosses Troubled Mortgage Arm Into Bankruptcy

Renewing focus on autos – and paying back a bailout.

by on May.15, 2012

Ally, the former GMAC, shifts focus back to auto loans.

Ally Financial Inc. the nation’s largest automotive lender, has placed its money-losing mortgage subsidiary into bankruptcy – a move that actually could free it up to stage a much-anticipated IPO.

The bankruptcy filing was part of series of strategic actions aimed at strengthening the company’s longer-term financial profile and accelerating repayment of the U.S. Treasury’s loans that bailed out Ally when it was still operating as the General Motors Acceptance Corp.

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The subsidiary, known as Residential Capital, or ResCap, has been saddled with billions of dollars of so-called “toxic” loans generated during the bubble economy that came crashing down in 2008 and 2009, sinking a number of home lenders.


GM Takes Major Step to Sever Ties to Former GMAC

GM Sets $1 bil Price Tag on Ally Financial Shares

by on Mar.23, 2011

GM takes another step to sever ties with the former GMAC, now known as Ally Financial.

General Motors has announced it will use a new public offering to sell off $1 billion in preferred stock in Ally Financial Inc. — further distancing itself from its long-time in-house lending arm.

The shares represent 100% of the outstanding Series A preferred stock for Ally, which used to be known as GMAC, for decades the so-called “captive finance subsidiary” of the Detroit automaker. GM gave up control of GMAC in 2006 and has since taken steps to expand its sources of automotive lending.

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“Today, we are taking another step forward in our strategy to strengthen and simplify the company’s balance sheet,” said Chris Liddell, GM outgoing vice chairman and chief financial officer.

The transaction will result in a book gain of $300 million to be recorded in the first quarter of 2011. Following the sale, GM’s investment in Ally Financial will consist of a 9.9% interest in Ally common stock. GM reportedly passed on an opportunity to exchange the preferred shares for more equity in Ally Financial, which was originally known as General Motors Acceptance Corp.