Personal Financial Tips

Article by James Hunting

Crisis is said to be coming to its end, however, in certain companies the situation does not get any better. To fight the financial recession many companies had to undertake the anti-crisis programs to survive. This included cutting the expenses, thus lowering salary rates and cutting personnel. This approach was taken by small companies as well as by large enterprises

American General Finance Inc, is one of the nation’s largest consumer finance organizations. It is an AIG subsidiary. The company provides loans, retail financing and other credit related products. American General Finance (AGF) is based in Evansville, IN, with branch locations in 45 states, Puerto Rico and the U.S. Virgin Islands. Until the recent times the company has been serving roughly 2 million customers and has been operating roughly 1,200 branches located nationwide. AGF employed an estimated 8,000 people.

However, as a result of unfavorable market conditions and liquidity constraints, at the beginning of May, American General Finance announced about its plans to cut 500 jobs and close 150 offices. At that time, Mark Herr, an AIG spokesman, declined to say where or when the cuts and closings will occur. Later on that month American General Finance announced plans to eliminate financial relationships with 21,500 to 3000 retail merchants. According to the media announcement, the company was going to stop servicing some business by June 11, citing current economic conditions and resulting liquidity constraints.Like other major credit and loan companies, American General Finance has suffered losses from the customers to be unable to pay their credits. The company has been borrowing funds to keep its operations on the surface.

However, after AIG started experiencing troubles in 2008, American General Finance also lost its income. The company reported to have lost around .3 billion.At the end of 2008, the company shut down 179 locations thus cutting 380 jobs, mainly in Connecticut, Massachusetts, Maine, New Hampshire and Rhode Island.

The hard times made AIG sell off assets to pay off the billions of dollars in bailout money it has received from the federal government. Reporting the situation in August, American General Finance has already closed 145 of its 1,400 branches, this ended up in cutting 900 work places (11% of its workforce).

Those were the measures undertaken by American General Finance during this year so far. No further cost-cutting plan has been yet announced by the company. Nobody can predict the situation in the global economy. Time will show…

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