If GM decides to sell General Motors Acceptance Corp., they will be declaring bankruptcy in the future, simple as that. General Motors should not be seen as an auto maker, but rather as a financier with an automotive division attached to it.

In the past, GM as a whole has been able to make money, even while their automotive operations suffered. The profits from their financial arm have surpassed these losses in GMs better days. Unfortunately, their manufacturing losses have been far too steep lately and their obligations to employees too great, calling their future into question. Despite managements assurances that bankruptcy will not be declared, all other signs suggest that it is imminent. If GM decides to sell GMAC, their fate may as well be sealed.

The only hope for GM at this point, is that they are somehow able to recoup some of the losses in market share that they have suffered from the last few years. Not because they will make money from the sales themselves, but because of the cash that their financial division will generate from financing these sales. If they are somehow able to regain market share, but no longer have GMAC, these market share increases will be meaningless. Selling GMAC may delay bankruptcy, but it will also guarentee it. The most recent offer for a controlling stake in GMAC was $13 Billion. While this may seem like a good amount of money, it isnt when compared to the $8.45 Billion that they lost in 2005. Take out GMACs profits, and their loss increases to over $11 Billion. At these rates, selling GMAC would only provide a little more than one years worth of cash to burn. GMAC generated $2.8 Billion in income in the most recent year alone. Should they somehow be able to survive after selling GMAC, which I dont believe is possible, their main source of income will be gone. If that happens, the next time a drought like they are currently in rolls around, they will have nothing to fall back on.

Unfortunately, I dont have any ingenious plan to provide management with, I dont know what will fix the mess that the UAW has created for them. What I can do though, is say that selling GMAC is not the way to turn things around. So to the GM board, please, for the sake of your shareholders, dont even consider the recent $13 Billion bid.

Joe Urgo

Founder of the Wall Street 2.0 Network, a collection of the web's best financial blogs... The Intelligent Investment Community. Also a YoungWealthWeekly author, publisher of The New Wall Street, and a Seeking Alpha Contributor.