The news this morning that Cerberus Capital is re-organizing GMAC's auto finance business is the latest indication the slowing economy and tighter credit are having a definite impact on the auto business.
GMAC's restructuring includes cutting a thousand jobs and closing a majority of it's auto finance offices, according to the Wall Street Journal. Cerberus Capital, the majority owner of GMAC, is moving decisively.
I'm not surprised. Nor should you be. As the economy has slowed down, the number of auto loans in default has increased, car repo's are up, and lenders are toying more openly with 84 month loans. It's clear the full impact of people not being able to afford car payments they once signed up for is coming home to roost.
If there is any good news in all this it's the belief of some in the industry that these trends may be peaking and therefore signaling the "bottom" of the market. We'll see, I'm not ready to say that. But clearly, these are tough days for those building, selling, and financing new cars, trucks, and SUVs.
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