GMAC LLC at a Glance


  • Good training


  • Tough hours


Taking the "GM" out of GMAC

The General Motors Acceptance Corporation (GMAC) was the financial services arm of General Motors until GM sold 51 percent of the company to a private investor group led by Cerberus Capital Management.  GMAC started out offering financing to GM dealerships and their customers.  However, the company has moved beyond simply providing automotive financing, maturing into a diversified, financial services company, selling insurance, mortgage products and real estate services in some 40 countries.  As of June 30, 2009, GMAC held some $181 billion in assets.

Cars, mortgages and more

GMAC’s business operation is divided into five main units: global automotive finance, insurance, commercial finance, Ally and mortgage operations.  GMAC’s global automotive finance sector offers wholesale and retail automotive financing products and services primarily to GM and Chrysler dealers and customers.  The insurance sector presents a wide range of insurance and insurance-related products and services for individual consumers as well as automotive dealerships and other businesses.  Housing the commercial services division, European operations and the structured finance division operations, commercial finance provides secured lending products in North America and Europe for middle-market businesses.  Ally, an online bank which is a member of FDIC, offers a variety of savings products like certificates of deposit, online savings accounts and money market accounts.  Finally, GMAC’s mortgage operations, including Residential Capital, LLC and the mortgage activities of Ally Bank and ResMor Trust, focuses on the residential real estate market in the United States and some countries.

Waiting at the end of the assembly line

GMAC was formed in 1919 to provide GM auto dealers with the necessary financing to maintain large-vehicle inventories.  At the time, most dealerships carried only a few cars as they were required to buy their stock in cash.  The invention of the assembly line allowed for the rapid production of large quantities of cars.  Thus, the factories wanted dealers to buy larger quantities of cars to keep factory operations running smoothly.  So, the General Motors Acceptance Corp. was formed to provide dealers with the financing necessary to keep these large inventories.  GMAC initially operated in Detroit, New York, Chicago, San Francisco and Toronto.  By 1920, GMAC expanded to the United Kingdom and by 1928 had sold about 4 million retail contracts.  In 1999, GMAC bought Bank of New York's asset-based lending and factory business to create its commercial finance group.  In 2000, the company launched SmartAuction, an online auction site for used GM vehicles.  GMAC expanded to China in 2004, becoming the first, foreign-based financial services company to offer vehicle financing.  Also in 2004, the company opened the GMAC Automotive Bank which raises money from FDIC-insured certificates of deposit.  The bank allows the company to diversify funding sources and gives GMAC access to lower-cost sources of funding.

Restructuring GMAC

In order to raise money for reorganization, General Motors has been divesting many assets, including GMAC.  This divestiture was prompted by investor Kirk Kerkorian and Jerome York, his former representative on GM's board.  In 2005, GMAC announced that Bank of America agreed to purchase up to $55-billion worth of GMAC retail automotive contracts for a five-year period; sold a 78-percent stake in its commercial mortgage operations, GMAC Commercial Holding, for $1.5 billion to an equity group that included Kohlberg Kravis Roberts & Co., Five Mile Capital Partners and Goldman Sachs Capital Partners; and restructured its residential mortgage operations, creating a new wholly owned subsidiary named Residential Capital Corporation.  This allowed GMAC to up its credit rating apart from GM.  In 2006, a group of investors led by Cerberus Capital Managementâ€"including Citigroup, Aozora Bank Ltd. of Japan and a subsidiary of PNC Financial Services Groupâ€"agreed to purchase 51 percent of GMAC from GM, raising nearly $14 billion for the cash-strapped parent company.  GM continues to own the remaining 49 percent of GMAC and collects a dividend from its holdings.  The company also implemented a restructuring plan in October 2007, due to the housing-market crisis, which involved a 25-percent reduction in the firm’s worldwide workforce.

By the numbers

GMAC posted a $1.9 billion net income for full year 2008 compared with net loss of $2.3 billion in the previous year.  Revenue was also down in 2008 to $18.4 billion from $21.2 billion in 2007.  The firm endured a $3.9-billion net loss in the second quarter of 2009 compared with the $2.5 billion net loss it incurred during the second quarter of 2008.  Net revenue for the quarter slipped down to $1.03 billion from $1.3 billion in the same quarter of last year.

- Show Less + Show Full Description


200 Renaissance Center
Detroit, MI 48265
Phone: (313) 556-5000
Fax: (313) 556-5108


  • Employer Type: Private
  • CEO: Alvaro G. de Molina
  • 2008 Employees: 22,700

Key Financials

  • 2008 Revenue: $16,858 million