A circular argument

Jim Henry is a special correspondent for Automotive News
Does GM need a real captive finance company? It boils down to objectives.

If the goal is selling more cars and trucks, it needs a captive willing to do things a bank wouldn't.

For instance, a captive will offer interest-free loans or cut-rate leases on a model with low residual value, with the understanding that GM will pay it back.

A bank doesn't want to take that much risk, and a car company doesn't want to pay an independent bank that much money.

That's a good argument for GM making a real captive out of AmeriCredit. And ironically, it was suggested by the head of GM's current designated lender -- a bank.

Ally Financial CEO Michael Carpenter explained during a conference call this month that Ally isn't interested in taking captive-type risks.

Which kind of takes us full circle. Ally is the former GMAC, which helped kick off the discussion in the first place.