Dec 30, 2008 1
I was just re-reading my earlier post on What is Credit? when this piece of managerial brilliance crossed my desk – GMAC Adds Loans as U.S. Injects $6 Billion to Aid GM. Who else but GM could one depend on to provide a consistent farce?
There is little doubt in my mind that this company ought to go bankrupt (or be forced into bankruptcy – the management needs to be replaced. And the unions – well, forcing this company into bankruptcy might very well mean the loss of a great deal of jobs and the brinkmanship that they have played in this farce wouldn’t be more well recompensed) because it doesn’t seem that its management has a clue about what brought them to the brink in the first place or maybe even left them dangling over a precipice. What brought them to the brink in the first place is the dearth of, nay, absence of profit that the firm chalked up these past years – prudent firms grow profit and trim costs. GM on the other hand does the reverse. What pushed them over the edge is the fact that the a great number of that elusive group called the US consumer is strapped for cash, not credit worthy by reason of being neck deep in debt.
Therefore, GM has decided that its flagging fortunes will be rescued thus:
GMAC will now lend to vehicle buyers with credit scores of 621 or higher, compared with a previous standard of at least 700, according to a company statement. The higher threshold had excluded about 42 percent of U.S. consumers.
The company said it won’t finance