The head of the California Auto Dealer Association warned that as many as 40 percent of California consumers wouldn't qualify for an auto loan under new stricter guidelines announced by GMAC last week and that many General Motors Corp. dealers could be forced into bankruptcy. In a letter late Monday to GMAC CEO Alvaro G. de Molina, the California auto dealers president and CEO Peter Welch warned that GMAC's curtailment of financing for dealers stock -- called floorplan financing -- would put dealers out of business. "Unless immediately stopped, GMAC's actions will directly lead to insolvency of a number of our GM dealer members and will significantly erode GM's California market share," Welch wrote in the letter that also went to Treasury Secretary Henry Paulson and a top Cerberus Capital Management LP official, William Richter. "At a time of their greatest need, our GM dealers feel completely abandoned by GMAC's rogue actions, " according to the letter
Read Article