Surprised, not really
From the "you really shouldn't pile on when they're down" file, GM has a new advertising campaign paid for by the taxpayers running during the NFL football playoffs (and college bowl games) - and how about this for a novel idea, maybe college should have a football playoff too.
And one of the ads featured a big behemoth Cadillac against a cute MINI Cooper. My only surprise is why General Motors would go up against a MINI with that kind of product as if anyone who was considering a MINI would suddenly change their mind and run over to the nearest Cadillac dealership for a test drive.
But how about this fellow taxpayers. GMAC also got some bailout funds and promptly started lending at zero interest and reduced interest rates to subprime borrowers. From Bloomberg (my emphasis added):
GMAC LLC, bolstered by a $6 billion federal bailout, resumed lending to General Motors Corp. customers with lower credit scores as the U.S. stepped up efforts to keep the automaker in business. … Within hours, GM was offering five-year, no- interest loans to halt this year’s 22 percent slide in sales, which dealers have blamed on a lack of financing for customers.
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 “higher-risk transactions,” instead concentrating on prime customers who are more likely to repay using “responsible credit standards.” The relaxed policy “will allow us to return to more normal levels of financing volume, and should help in efforts to stabilize the U.S. auto industry,” GMAC President Bill Muir said in today’s statement.
Wasn't this the kind of lending that got us into this mess in the first place.
Your taxpayer money at work. Are you surprised.