GMAC Cuts Jobs, Offices
By Michelle Krebs February 21, 2008GMAC, the financial services group owned by General Motors and Cerberus Capital Management, said it would close 15 of its 20 offices and eliminate 930 â or 15 percent â of its jobs in North America.
The cost-cutting moves come on the heels of GMAC reporting a loss of $724 million in the fourth quarter of 2007, compared with a $1-billion profit a year earlier. GMACâs troubles are due to the crisis in the housing and subprime lending businesses. In addition, delinquencies on car loans are rising.
As part of its restructuring, GMAC apparently is considering the sale of all or part of ResCap, its beleaguered mortgage lending business.
The remaining five offices will be regional centers. GMAC employs 26,700 people worldwide.
Cerberus bought a 51 percent stake of GMAC in late 2006 with GM retaining 49 percent.
Cerberus chief executive Stephen Feinberg wrote in a private letter in January to investors that has since gone public that GMAC will survive but could be at risk for further declines if the credit markets worsen.
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