The US Federal Reserve on Wednesday approved a request by GMAC, the troubled financial arm of General Motors, to become a bank holding company, allowing it to tap government bailout funds and emergency loans.
The move, announced only hours before Christmas Day, boosts the prospects of General Motors after the US government last week approved a US$13.4 billion rescue loan package for GM and Chrysler to stave off collapse amid tight credit and dismal sales.
GMAC faced possible bankruptcy, jeopardizing financing for GM car dealers and customers, and its demise could have dragged down the Detroit automaker’s fortunes with it.
“In light of the unusual and exigent circumstances affecting the financial markets, and all other facts and circumstances, the Board has determined that emergency conditions exist that justify expeditious action on this proposal” for changing GMAC’s legal status, the Fed said in its decision, which the board approved four votes to one.
Under the move, GM and Cerberus Capital Management must reduce their ownership stakes in GMAC, the Fed said.
GM, which owns 49 percent of GMAC, has to cut its ownership share to less than 10 percent in voting shares and equity. Cerberus, the private equity owner of Chrysler, must reduce its 51-percent stake to no more than 14.9 percent in voting shares and 33 percent in total equity, the decision said.
The move will “benefit the public by strengthening GMAC’s ability to fund the purchases of vehicles manufactured by GM and other companies and by helping to normalize the credit markets for such purchases,” the Fed said.
GMAC chief executive Alvaro de Molina in a statement hailed the decision as “a key turning point” for the company.
“It is critically important to our company and the broader economy to resume responsible lending to consumers and businesses,” he said.
GMAC, by becoming a federally regulated bank holding company, becomes the latest firm to gain access to a share of the US$700 billion government bailout package initially introduced to shore up financial firms.
Debt-strapped GMAC had said earlier this month it did not expect the Federal Reserve would grant its request as it could not meet capital requirements.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary