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GMAC still looking at HQ move to Charlotte
Lender making conversion to a bank holding company
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Published: January 7, 2009
CHARLOTTE - GMAC Financial Services, which has taken key steps to shore up its finances in recent weeks, continues to consider moving its headquarters to the Ballantyne area of Charlotte, but it hasn't completed what could be a boon for Charlotte's beleaguered banking sector, a source familiar with the situation said Monday.
After receiving approval to become a bank holding company last month, GMAC, which provides auto and home-mortgage loans, will need compliance, legal and other staffs that are likely to become available because of expected job cuts as Wells Fargo & Co. absorbs Wachovia Corp.
GMAC, which now has its headquarters in Detroit, already has an office in Charlotte and has been adding marketing and other executives in the city.
GMAC spokeswoman Gina Proia said that the company "would expect to continue to expand its presence in Charlotte" as part of its conversion into a bank holding company. But she said that the company has not made any announcement regarding a move of headquarters.
GMAC's insurance operations are based in Winston-Salem. Any move to Charlotte is not expected to affect operations in Winston-Salem, said another spokeswoman, Beth Coggins.
Bogged down by mortgage-related losses in recent quarters, GMAC has undertaken a series of complex maneuvers designed to stabilize the company, which is partly owned by ailing automaker General Motors Corp. Last month, the Federal Reserve approved its application to become a bank holding company, and the U.S. Treasury has agreed to provide it with $5 billion in capital under the federal bailout program. GMAC also raised capital through a complicated exchange of its bonds, although it didn't meet stated goals.
Before signing off on a headquarters move, it needs to reconstitute its board -- a requirement related to the conversion as a bank holding company and the capital injection. Since 2006, GMAC has been majority owned by investors led by Cerberus Capital Management, a private-equity company.
GMAC has said that it has about 200 employees in Charlotte in a call center and in other operations, such as marketing. GMAC's chief executive, Al de Molina, is a former chief financial officer for Bank of America Corp. and has kept his house in Charlotte.
Though the company has added some executives in Charlotte, it also has cut back jobs in the city in the past year. The city was once a hub for the company's auto-financing unit, but that function was eliminated as part of an office consolidation.
GMAC has suffered from the downturn in the auto business and the mortgage industry. Through the first three quarters of last year, GMAC lost about $5.6 billion, largely because of its Residential Capital mortgage unit, once a big subprime lender.
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