Is Cerberus about to Strip 'n Flip GMAC? According to Bloomberg, the floundering finance company will announce that they're closing 75 percent of their regional auto-lending centers in the U.S. and Canada. That means 12 of the 16 GMAC's U.S. centers and three of four Canadian GMAC centers will bite the dust. In a letter to be delivered to GM dealers, GMAC VP Barbara Stokel said the move was part of an effort "to make structural cost reductions to restore our competitive position." The remaining offices will be in Dallas, Pittsburgh, Atlanta, Chicago and Toronto. You can't help but notice the conspicuous absence of an office location on the west coast. Is this an indication of how little business GM dealers are doing in that area? Or does it mean the Dallas office is so good it can handle the entire western half of the country? My money's on a little of both.
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The Houston customer service/Underwriting call center I managed did service California, by having a late shift and limited staffing. Cerberus ain’t stupid, its expensive to have a West Coast operation compared to a few more warm bodies in Texas instead.
Payback is a…
This reminds me of the Memphis Belle scene where Captain Dearborn (Mathew Modine), struggling to bring the shot to pieces B-17 home, gambles the Messerschmitts are gone and orders the machine guns and ammunition jettisoned.
No buyers, no loans, no clerks.
This is not a surprising move. Of course it makes sense to close up brick & motar and consolidate. I would imagine others to follow suit. Especially with the recent brilliant idea to offer 84 month financing. They all are doomed, foreign and domestic.
Additionally, office location is irrelevant to where an organization does business. No one in their right mind puts an operations center on the west coast. The operating costs there compared to other areas of the country dictate you run them somewhere else.
In an age where virtually all financial transactions are electronic and we as customers are approved or rejected based on credit scores, why would you need 16 credit approval and admin offices in the US and four in Canada. GMAC may be in financial trouble but this reduction just makes good sense.