General Motors is selling a 51% stake in GMAC, the part of the company that give loans to people buying its cars. It is being sold to a consortium led by private investment firm Cerberus Capital Management. The price is 11.6 billion euros, payable over three years. GM’s chief executive, Rick Wagoner, has been selling assets to help cover the costs of developing new vehicles to win back customers.
GM is still the world’s biggest carmaker, with turnover last year of 160 billion euros and 335,000 workers, but it made a loss of 8.9 billion euros last year and continued losses have reduced its credit rating, which means it has to pay more to borrow money. With the change of ownership GMAC, which last year made a profit of two billion euros, could have its credit rating raised. That would benefit the new investors and GM, which will continue to own 49% of the financing business.
GM said the deal is a major step in the company’s effort to drag itself back into profitability. Its share of the US car market is at its lowest since 1925.