GM begs Obama for bailout; GMAC scrambles
General Motors congratulates Obama and urges him to honor his "pledge to support our nation's domestic auto industry in its ongoing efforts to transform its business and develop new technologies...at an especially critical time."
As stocks plunge and auto sales hit a modern low, General Motors congratulates Obama on his "historic win" -- and urges him to honor his "pledge to support our nation's domestic auto industry in its ongoing efforts to transform its business and develop new technologies...at an especially critical time." Statement here . UPDATE: GM to announce "important changes" Friday. Detroit News cites internal e-mail here.
Thousands of Philadelphia-area workers depend on GM. The company's Saturn assembly plant outside Wilmington, which employs over 1,000, will be almost the last big East Coast auto factory after Chrysler shuts its Newark, Del. works next month. And 1,350 GMAC Mortgage workers in Fort Washington, plus 30 in Horsham, are hoping the longtime GM finance affiliate (now owned by Cerebrus Capital Management and financed by Citigroup), whose specialties include loans to the dwindling population of GM new-vehicle buyers, can reorganize its stricken ResCap home mortgage unit before it runs out of money and has to shut down.
GMAC is trying to reorganize as a bank holding company; it already owns GMAC Bank, in Wilmington, and is trying to boost deposits as a cheap source of funding. GMAC has already sold or spun off key subsidiaries, including Campark (commercial mortgages), whcih employs 600 in Horsham, and its reinsurance business, based in Mt. Laurel.
GM isn't the only company angling for help from the new administration. Investors are betting which pharmaceutical, health insurance and telecom companies will prosper and which will hurt under President Obama. Bloomberg story here, predicts Comcast and Verizon will hurt, but Cigna and other health insurers could gain customers. Doesn't look like they're taking campaign donations from executives into their analysis.
For a closer look at the new Congress and its increased Democratic majority, check out BlankRome's Government Relations Update here.