By Peter Rudegeair
NEW YORK (Reuters) - Ally Financial Inc's (N:ALLY) new chief executive officer said on Thursday he expects General Motors Co (N:GM) to eventually end all of its leasing agreements with the bank, threatening to cut off about one-quarter of its retail lending business.
In January, the automaker said its in-house financing arm, GM Financial, would replace Ally as the exclusive lessor for Buick, GMC and Cadillac vehicles. Ally expects GM Financial to eventually take over leasing for Chevrolet, the remaining U.S. brand, CEO Jeffrey Brown said in an interview.
"Through time that is a planning assumption we've got today," Brown told Reuters.
A GM spokesman said that even though the automaker is boosting the capability and scale of GM Financial, it expects Ally to continue to play a role supporting GM dealers and customers.
Ally will continue to assist dealers with leasing if GM Financial decides not to be the exclusive provider of leases for all of its brands, Brown said, but the company is preparing for a worst-case scenarios.
"We are going to support the dealers," Brown said. "We don't hold grudges."
Michael Carpenter, Ally's CEO until Feb. 2, had said he was surprised GM was reducing competition in its dealerships.
"What pisses us off is when we don't get the chance to compete on a heads-up basis," Carpenter said in January.
Brown said one of his first tasks as CEO was to reassure GM how committed Ally was to their relationship.
"There was a lot of heat and a lot of tension," Brown said of the coverage of Carpenter's remarks. "I'm going to take the noise level down, take the heat down."
Ally was formerly the financing arm of GM, known as General Motors Acceptance Corp.
Ally shares rose 1.6 percent to $21.87 (14 pounds).