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GMAC headed for $5 billion loss
????By Colin Barr ????GMAC, the troubled finance company that last week scored a third government bailout, said Tuesday it expects to post a record fourth-quarter loss of $5 billion. ????The company also said it has decided to try to sell its ResCap mortgage unit, which has lost billions of dollars since the U.S. housing market crashed. Those losses have strained the already stretched finances at GMAC, which is best known as a lender to the troubled U.S. auto industry. ????ResCap has been "very much a millstone around the company's neck," GMAC chief Michael Carpenter told investors on a conference call Tuesday afternoon. He said GMAC's board entertained all alternatives for ResCap, including possible bankruptcy filings, before deciding to consider its so-called strategic alternatives. ????Asked if he could describe what the alternatives might be, Carpenter replied, "Not really." He then said GMAC might sell some mortgage assets but added that the GMAC's plan is essentially "a blank sheet of paper." ????GMAC last week raised $3.8 billion by selling preferred securities to the government, satisfying the capital deficit identified during stress tests last spring. The sale gave the U.S. a 56% stake in GMAC while cutting the stake of other shareholders, including private equity firm Cerberus and car maker GM, by a third. ????GMAC got $7.5 billion from the government at the end of 2008 and $6 billion in the middle of last year, as regulators sought to shore up the sagging auto financing market. ????GMAC lost more than $5 billion in the first nine months of 2009 and has lost money in six of the past seven quarters, including two quarters in 2008 in which it lost at least $2.5 billion. ????In November, the company hired Carpenter, a former Citigroup (C, Fortune 500) executive, to take over for Alvaro de Molina, who had run GMAC since before the bailouts started. ????At the time, Carpenter said his goal was "accelerating the strategic and operational changes necessary to focus GMAC on its core auto finance and related businesses."
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