Treasury gives $5 billion to GMAC in bailout funds

by Sundeep Kothari

GMAC receives $5 billion in bailout money

The Treasury Dep’t will give $5 billion to GMAC from the $700 billion bank bailout program (TARP). In addition, GM will receive an addition $1 billion in loans to buy equity from GMAC. This $6 billion will allow GMAC to avoid bankruptcy, which would more than likely have also brought down GM into bankruptcy as well.

This money is in addition to the previous $17.4 billion already promised from TARP to GM.

GM owns 49% of GMAC, while the rest is owned by Cerberus.

This money will allow GM and GMAC to survive to the Obama administration, but deep and severe cuts are necessary for GM and GMAC to survive. Toyota couldn’t even make money in this economy, and GM’s cars are generally less well received.