BUSINESS BRIEFS
GMAC loses its exclusive rights on GM loans
Associated Press
DETROIT — GMAC LLC will no longer have exclusive rights to provide no- or low-interest loans to people who take advantage of General Motors financing incentives, as part of the complex deal that gave the troubled lender billions in federal aid.
The move could reduce the Detroit automaker's dependence on GMAC to provide financing and possibly boost its sales by giving consumers more options for affordable loans.
GMAC, which provides GM dealer and customer financing in addition to home mortgage loans, disclosed the terms of the agreement in a regulatory filing yesterday. The lender said the government will get 5 million preferred shares of GMAC paying 8 percent interest in exchange for its $5 billion capital injection to help GMAC avoid bankruptcy.
TREASURY DANGLES RESCUE PACKAGE
WASHINGTON — The Treasury Department opened the door yesterday to using a Citigroup-style rescue package to help other troubled financial institutions.
The financial lifeline thrown to Citigroup Inc. in late November involved backing billions in risky assets and providing the banking giant with a fresh capital infusion.
Treasury said participation by other companies in such a program would be weighed on a case-by-case basis. Treasury said it would consider, among other things, whether the "destabilization" of a financial institution could threaten the viability of creditors and others. It also would weigh the extent to which the institution faced a loss of confidence because of its troubled assets.
The information was contained in guidelines for the initiative, dubbed the Targeted Investment Program, unveiled yesterday. Separately, a new program that provides government backing for a financial institution's potential losses from risky assets will be used sparingly, the department said.
CRUDE SURPASSES $46 PER BARREL
HOUSTON — Exactly one year after crude eclipsed $100 a barrel for the first time, 2009 trading began yesterday with prices roughly half their year-ago levels, and some believe oil could be headed even lower.
Oil markets kicked off the new year with crude climbing above $46 a barrel.
A variety of factors were likely at work, including continued violence in Gaza and expectations that OPEC would carry out its largest production cut ever to stem historic price declines.
Oil market activity was also light as many traders took a long holiday weekend, and that can lead to price swings.
Light, sweet crude for February delivery rose $1.74 to settle at $46.34 a barrel on the New York Mercantile Exchange. Oil's surge into triple digits for the first time one year ago was the start of a climb that would peak above $147 a barrel by July. Since then, amid fears of a prolonged global recession and crumbling worldwide demand, crude prices have plunged more than 70 percent.
Gasoline prices ticked up a bit overnight, but the national average price for a gallon of unleaded is still more than $1.40 cheaper than a year ago.
VISTEON SLASHES WORKERS' PAY 20%
VAN BUREN TOWNSHIP, Mich. — Automotive supplier Visteon Corp. said yesterday it will shift more than 2,000 workers to a four-day week and cut their pay by 20 percent as tight credit and collapsing sales cause huge industry losses.
The moves will begin on Monday and affect all 2,000 workers at Visteon's headquarters in Wayne County's Van Buren Township and 50 at a testing center in Plymouth. The company has about 35,000 employees in 27 countries.
Spokesman Jim Fisher said the four-day schedule at the Michigan facilities will be evaluated at the end of the month. Visteon recently announced 800 job cuts on top of 2,000 that already had been eliminated.
The company makes satellite radios, instrument displays, electronic climate controls and other parts.
