[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/12/30/t1main.gmac.gi.jpg caption="GMAC Financial Services will get a new $3.8 billion bailout from the Treasury."]
CNN Financial News Producer
Just when it seemed like all the government bailouts were over and done with for 2009, we’ve got word that GMAC Financial Services is getting a third round of bailout money from the Treasury Dept.
The troubled auto and mortgage lender will collect $3.8 billion of additional aid on top of the nearly $13.5 billion already received since December 2008, the Treasury said in a statement late today.
The fresh lifeline is intended to return Detroit-based GMAC to profitability in the first quarter of 2010 and will likely allow GMAC to avoid placing its home lending unit, Residential Capital, into bankruptcy.
This new infusion will also increase the Treasury's stake in GMAC from 35% to 56%, and the government will have the right to appoint two additional directors to the company's board.
As the federal government shovels out billions of dollars, state and local tax revenues fell nearly 7% in the third quarter of 2009 from a year ago. That’s according to a report from the Census Bureau that highlights just how hard the recession has hit states’ coffers.
Sales taxes declined 9% to $70 billion in the third quarter compared with the year-ago period, the Census Bureau said. Income taxes plunged nearly 12% to about $58 billion. Combined, sales taxes and income taxes make up roughly half of state and local tax revenues.
General Motors is recalling some 22,000 Chevrolet Corvettes because of potentially leaky roofs, National Highway Traffic Safety Administration said.
The recall includes 2005-2007 model year Corvettes and 2006-2007 Corvette Z06s with removable roofs.
A problem with the adhesive between the roof panel and the frame could cause them to pull apart, the agency said.
That follows the news Tuesday that GM will offer auto dealers large incentives to move vehicles from its defunct Saturn and Pontiac brands in a sale that deeply discounts sticker prices.
A GM spokesman said the automaker sent letters to dealers earlier this month detailing a plan to pay them $7,000 for each Saturn and Pontiac brand car they can move off their lots.
Under the plan, dealers technically become the first owner of the cars in order to get the incentive. They can then pass on the incentives by selling the “used” vehicles to customers at a deep discount. The deal expires Jan. 4.
The factory-to-dealer incentive plan is an unusual move. If GM had taken the common approach of placing the $7,000 as a customer incentive, the company would have had to wait for buyers to come into the showroom and take the deal.
Instead, GM's plan allows the company to clear the inventory off its books right away and leaves it to the dealers to pass on the incentive.
GM, the largest U.S. automaker, filed for bankruptcy June 1 and reorganized.
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