GM takes another hit.

[No Boss]

$305 million net loss

DETROIT (Reuters) - General Motors Corp's (GM.N: Quote, Profile , Research) former finance arm GMAC on Wednesday swung to a first-quarter loss, citing continued pressure in the mortgage market.

GMAC, in which GM retains a 49 percent stake, posted a net loss of $305 million, compared with a profit of $495 million a year earlier.

GMAC's mortgage unit ResCap posted a quarterly net loss of $910 million, more than offsetting gains from its insurance and auto finance divisions.

Aside from it being an incredibly short article, it made me think GM might have more problems than we can clearly see. Also, it's clear the debatable quality of their cars is not the reason for their successive financial problems.

 

[thedguy]

If I recall correctly GMAC used to be the very thing that kept them (quite) profitable. They only recently sold off a portion of the company.

 

[Samir]

Sorting out why GM isn't successful is a bit like trying to sort out a plate of spaghetti (multiplied by 1,000,000).

GMAC was a big cash cow for them. If it's in the red too, that's scary.

 

[watto]

Holy moly. That's a turnaround into the negative (duh) of $774m. That's a shitload of money.

Poor old GM.

 

[NecroJoe]

What would cause their financing department lose so much money? Are people defaulting on their car loans like they've been doing on their home loans?