Government To Give Billions To GM's Funding Arm

The government says it will provide $5 billion to GMAC Financial Services from the $700 billion bank rescue program. The Treasury Department also says it will lend up to $1 billion to GM so it can participate in a debt for equity swap with GMAC, which is seeking to raise additional capital. The loan is in addition to the financial assistance the government announced earlier this month for GM and Chrysler.

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NPR's Business News starts with another bailout for the auto industry.

This time it's not to help build cars, but to buy them. The latest federal aid, worth $6 billion, is going to the financing arm of General Motors, GMAC. GMAC has provided most of the financing for GM's dealerships and people buying its cars, plus lots of home mortgages.

Over the past few months, the company's ability to lend has been sharply limited. GM says that's one reason U.S. auto sales plunged more than 40 percent in November. The new aid package is worth $6 billion. It includes a purchase of $5 billion in equity in GMAC, along with a billion dollar loan to help GM purchase more. That comes on top of the more than 13 billion in loans already earmarked for GM.

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