Document Type

Case Study

Case Series

The Rescue of the U.S. Auto Industry

JEL Codes

G01, G28


In 2008, GMAC was a $200 billion company providing financing to General Motors customers. As the Global Financial Crisis entered a critical stage in early 2008, GMAC’s funding strategy and liquidity position were adversely affected by the significant disruption in credit markets and the broader economic downturn. This reduced access to financing, which impacted GMAC’s ability to provide automotive wholesale inventory and retail financing to General Motors and Chrysler. In late 2008 and early 2009 GM and Chrysler underwent a complex restructuring process. To restore liquidity to GMAC’s auto finance business, the Federal Reserve agreed to expedite GMAC’s conversion to a bank holding company and to provide access to several of its and the Federal Deposit Insurance Corporation’s emergency liquidity programs, which GMAC used heavily throughout 2009 and 2010. The FDIC also provided GMAC with access to its Temporary Liquidity Guarantee Program. The US Treasury agreed to provide capital under the Automotive Industry Financing Program authorized under the Emergency Economic Stabilization Act of 2008. From December 2008 to December 2009, the Treasury invested $17.2 billion into GMAC. When the last of the government-held shares were sold in December 2014, taxpayers had recouped $19.6 billion, for a net return of $2.4 billion.

Date Revised