Tuesday, October 14, 2008

HBS Case: Consumer Finance

This will, one day, be a nice case study.

You cannot lose control of your finance arm. Ever. [Not that they didn't know that, but that's the way it is.]

GMAC said yesterday it's granting financing only to buyers with scores of at least 700, who represent about 58 percent of U.S. consumers. The Detroit-based company, now controlled by Cerberus Capital Management LP, provided 43 percent of GM's second-quarter auto loans.

and ...
PHILADELPHIA, Oct 13 (Reuters) - Cerberus Capital Management, which owns 80 percent of Chrysler, has no plans to divest its stake in Chrysler and aims to own an interest in any combined company that may result from a merger with the U.S. automaker, a source familiar with Cerberus' thinking said on Monday.

Of course, if you've lived life never having to use credit cards, either in your own name or otherwise, you have no FICO score. For "banks" these days, that means you are invisible, you may as well not exist.

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