May 21, 2009

The Treasury Department is poised to inject more than $7 billion into GMAC LLC, the first installment of a new government aid package that could reach $14 billion, according to people familiar with the matter.As a result of the move, the government within months could end up owning both GMAC and General Motors Corp. The GM plan being devised by President Barack Obama's auto task force calls for the government to emerge with a majority stake.

And the increasing infusion of taxpayer money into GMAC could turn the U.S. government into a majority shareholder there.The GMAC injection is designed to firm up the auto-financing company's battered balance sheet and allow it to continue making loans for car purchases at GM and Chrysler LLC. The Treasury already put $5 billion into GMAC in December.The GMAC funding is an illustration of how rapidly the government effort to rescue the U.S. auto industry is escalating in cost and scope.