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The levels of car manufacturing (and sales) [just like housing] in the US. have been too high and they have been artificial - built on excessive leverage more than increasing income and savings.
The financial outfits of GMAC and FordMotor Credit were needed to obtain more leverage, and spread the needed leverage more broadly, throughout the financial system, becoming additional recipient’s of the Fed’s boosted money supply, helping to tranform the nation into a consumer nation from a producer nation; helping to change the job outlook from producing industries to consuming industries.
The condition at Ally is a symptom of that history of leveraged excess. Taxpayers should take their losses and let it close; maybe a forced sale of Ally’s debts to Goldman Sucks would be a good deal.
But isn’t Ally the “best bank in the business” according to their ads? At least they answer their phones...
/s
No, they changed their name to dissociate itself from itself. GMAC was one of the top offenders in the subprime mortgage fiasco, and changed their name after they got a bailout. No self respecting person wanted to be associated with GMAC, and neither did they. "Years back" Sounds like 20 years ago, it was less than four.