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Ally, GM and taxpayers in tense triad
DETROIT, (UPI) -- General Motors Co. and its former subsidiary Ally Financial may require U.S. government intervention if tensions build, an industry expert said.
"There is a fundamental tension between the two," said Jeremy Anwyl, chief executive officer of Edmunds.com, and automotive Web site, The Washington Post reported Tuesday.
The Treasury may have to step in because the government owns 56 percent of Ally, formerly GMAC, which received $17.2 billion in Troubled Asset Relief Program funds during the recent financial industry meltdown.
The government also invested $50 billion in GM and, although Ally and GM count on each other, their goals "aren't necessarily the same," Anwyl said.
GM counts on Ally to help it sell cars. Ally, in turn, wants its own share of the profits to increase.
One government official said, "We have to keep an eye on what's going on for the sake of the taxpayer. But this is exactly why the government shouldn't be in private-sector business."
Although both companies say their relationship is strong, GM has recently proposed starting its own lending division that would fundamentally compete with Ally, undermining its success and its ability to repay taxpayers.
DETROIT, (UPI) -- General Motors Co. and its former subsidiary Ally Financial may require U.S. government intervention if tensions build, an industry expert said.
"There is a fundamental tension between the two," said Jeremy Anwyl, chief executive officer of Edmunds.com, and automotive Web site, The Washington Post reported Tuesday.
The Treasury may have to step in because the government owns 56 percent of Ally, formerly GMAC, which received $17.2 billion in Troubled Asset Relief Program funds during the recent financial industry meltdown.
The government also invested $50 billion in GM and, although Ally and GM count on each other, their goals "aren't necessarily the same," Anwyl said.
GM counts on Ally to help it sell cars. Ally, in turn, wants its own share of the profits to increase.
One government official said, "We have to keep an eye on what's going on for the sake of the taxpayer. But this is exactly why the government shouldn't be in private-sector business."
Although both companies say their relationship is strong, GM has recently proposed starting its own lending division that would fundamentally compete with Ally, undermining its success and its ability to repay taxpayers.
