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GMAC Loses $589 Million in First Quarter

May 6, 2008

GMAC LLC, the finance company part owned by General Motors Corp., made $258 million in automotive financing and a $132 million profit from the company’s insurance business in the first quarter.

However, those gains were offset by the $589 million lost from GMAC Residential Capital LLC, the company’s mortgage unit.

The loss is greater than the first quarter a year ago, when GMAC lost $305 million.

Despite several initiatives underway to stave losses, such as tightening lending standards and reducing the company’s workforce by 35 percent, GMAC said Tuesday that it may not return to profitability this year.

Automotive finance was down $140 million from the year ago quarter, and insurance was down $11 million from a year ago.

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