Chrysler to Suffer from GMAC's Passing to GM

With increasing rumors pointing to GMAC returning under GM's umbrella, rival Chrysler has begun considering its alternatives, with the company's CEO, Sergio Marchionne, saying this would require time.

"We need to transition to a permanent, stable solution for Chrysler going forward," Marchionne according to DetNews. "Once they tell me that GMAC is going to go back into General Motors, we need to have the time, the space to find an alternative solution to the long-term future of Chrysler."

"One of the things that we do not wish under any circumstance is to have an uncompetitive relationship vis-a-vis GM."

Chrysler is currently working with GMAC, after last year's turmoil made the Obama administration close Chrysler Financial and threw the two rivals into GMAC's back yard.

GMAC recently announced it will shed the GMAC and become Ally Financial. According to the rumors, GM plans to buy Ally, start a new finance unit and form a partnership with banks and other lenders.

GM's efforts are closely related to the yet-to-be-decided initial public offering tobe made by the carmaker. Having a financial arm which it fully controls would help both sales of vehicles and sales of stock.

“The IPO is going to be more of a success if they can sell more vehicles than they have been selling,” a person close the matter told Businessweek. “They should be able to do that if they can be more aggressive in their financing. Having their own finance company would certainly help.”