GM reported poor earnings results this morning. I was struck by the following quote from a WSJ report on the results:

“But GMAC, the company’s home and auto financing unit, has helped to pick up the slack. Net income for the unit was $656 million in the third quarter, up from the year-earlier’s $630 million, as demand for mortgages and refinancing stayed strong. GMAC appears to be on track to exceed its own estimate for annual earnings of $2 billion.”

Given that auto sales are tepid, I am betting that mortgages are a majority of GMAC’s profitability. And given that GM as a whole reported net income of only $440 million, financing is keeping GM afloat — at least profit-wise! Seems to me we need to reclassify GM as a finance company and not a manufacturing company! Beware when/if home loans finally turn southward. I guess GM will have to turn into an HMO at that point (a good part of GM’s costs are reportedly sunk into the support of its medical costs for employees)!