The circle is almost complete, young jedi

Dear Congressman,

I was scanning the news this morning when I was suddenly struck with a major case of "deja vu", courtesy of the Dow Jones newswire:

GM To Buy AmeriCredit For $3.5B
General Motors Co. (GM) said it will acquire auto-finance company AmeriCredit Corp. (ACF) in a $3.5 billion deal aimed at increasing availability of auto loans and leases.

The deal gives GM an in-house auto lender for the first time since it sold control of its GMAC finance arm in 2006, leaving it the only major auto maker without a so-called captive finance arm.

GM sees the acquisition as a way to drive up sales, which is critical as the company plans a return to the public markets as soon as this fall.

"Dealers and customers have said not having in-house finance arm hurts our ability to offer loans and leases," GM Chief Executive Edward E. Whitacre Jr. said in a conference call with auto analysts and media. "We were not as competitive as we could be."


As I gaze at my crystal ball of faded memories, something from the foggy past comes slowing into view...

3rd Rescue Considered for GMAC (NY TIMES)
October 29, 2009, 2:14 am
It might seem like a lot of cash for one super-sized clunker, a good-money-after-bad attempt to jump-start a broken giant of Detroit.

But as the Obama administration contemplates a third rescue of GMAC, the onetime finance arm of General Motors, federal officials, automotive executives and analysts all say the company is — just like the biggest Wall Street firms — too big to fail.

Despite two taxpayer-financed bailouts, GMAC is still struggling, even as its two biggest customers, General Motors and Chrysler, have put bankruptcy behind them, The New York Times’s Eric Dash reported.

So, if I see this correctly, since the only thing that has changed at GM, besides ditching a large load of debt in a massive bankruptcy, is that time has past. Thus, it is now okay that they re-enter the auto finance business using loans to bait people into buying more cars built with mediocre quality standards and hoping to not have too many recalls to wipe out potential profits.

I would not be surprised if, when the economy finally starts to turn around and fuel prices stay steady at their current price levels, that GM comes out with a new line of family-friendly, safety minded, all-American vehicles that provide the comfort that the buying public are crying out for. They will probably give it a name like the E-Vision, pitching that it was built using stringent eco-friendly standards of recycled materials and designed for the 21st century well-informed America proud consumer.

Translation: Re-introduce the SUV, give it a green spin, fabricate it with used parts from all those Ford Explorers turned in during the cash for clunkers deal, and then, the "coup de grace", give away free money using their own financing arm and worry about cash flow later.

Did I miss anything?

To quote Gordon Sumner (aka Sting) "History will teach us nothing..."