CNBC Exclusive: GMAC's Feldstein On Breaking Away From GM
GMAC is beginning a new era as an independent financial services company--after 87 years as a wholly owned subsidiary of General Motors. On Thursday GMsold its 51% stake in its most profitable GM unit to an investment consortium led by Cerberus Capital in a move that dramatically improved GMAC's credit profile and capital position. In a CNBC exclusive--GMAC's Chairman and CEO Eric Feldstein talked with Bill Griffeth about the company's new direction.
Feldstein said the biggest difference that investors will see is a real focus on profitable growth and expansion in the U.S. and abroad.
He sees growth opportunities in the company's uniquely broad international footprint--the company is in East Europe and believes there's growth in Latin America.
GMAC is also involved in the mortgage business and operates under the name Ditech. Feldstein says the mortgage industry is under attack and that it's very difficult and challenging--as volume is down and delinquency is up. Feldstein says it's a difficult market and he doesn't see it improving much in 2007--there will be casualties among the weaker players--Feldstein suggested GMAC will be open to acquisitions at attractive prices.
And then there's the name. It will remain GMAC-- but Feldstein said but the company will also operate under other names.
Is an IPO down the road? Feldstein is not thinking that way yet. Cerberus has a 5 year hold on owning GMAC.