As GMAC keeps to its prime-lending knitting, the latest casualties of its cost-cutting measures are Nuvell and National Auto Finance, which shut down today, AutoFinanceNews.net has learned.
Nuvell handled GMAC’s nonprime and private-label business; National financed non-GM vehicles for prime and nonprime customers.
In all, 212 employees lost their jobs. Another 136 took positions at GMAC, including those who handle Nuvell’s private-label business for Suzuki, spokesman Mike Stoller told AutoFinanceNews.net.
“With the current macroeconomic situation, we are focusing on our core business, which is prime auto lending,” Stoller said. GMAC is also working to reduce brands, he said, now that it has been granted bank-holding-company status. The government, through its Troubled Asset Relief Program, pumped $6 billion of fresh capital into the lender on Dec. 30.
Part of the issue, too, is the potential overlap between GMAC and Nuvell. The line is fuzzy when there’s just a 10-point difference in credit scores acceptable for one lender and not the other. Ford Motor Credit recognized the issue back in 2002, shuttering its Fairlane Credit subsidiary because it had “two groups of people calling on the same dealers,” a senior executive said at the time.
Though not surprising for a company that needs to streamline expenses, it’s a complete about-face from GMAC’s position for the subsidiary just two years ago. In early 2007, National Auto Finance unveiled three new loan products meant to win business at non-GM dealerships.
“We have some challenges ahead of us, but it’s a very exciting time for us,” David Bender, National’s executive vice president of marketing and development, told AutoFinanceNews.net sister publication Auto Finance News at that time. “We’re being asked to be that conduit” for GMAC expansion into non-GM vehicle financing, he added.
My, how times have changed.