GMAC Financial Services will receive a third round of bailout funds from the U.S. Treasury Department and the government will have a controlling stake in the company, according to a government report Wednesday.
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 Wednesday.
The fresh lifeline is intended to return Detroit-based GMAC to profitability in the first quarter of 2010, according to the report, and will likely allow GMAC to avoid placing its home lending unit, Residential Capital, into bankruptcy.
This additional money will give the company the "capital buffer" it needs "to meet the worse-than-expected economic scenario," GMAC said in a statement Wednesday.
The Treasury's stake in GMAC will increase from 35% to 56%, and the government will have the right to appoint two additional directors to the company's Board of Directors.
This is not capitalism, but Socialism.