Trickle down economy? Reward the elite & they will create jobs? Bailouts went to CEO bonuses not jobs
Nov. 10 (Bloomberg) -- American International Group Inc.’s consumer lender said it eliminated about 300 jobs and shut 25 branches in the third quarter after the company lost access to its usual sources of funding.American General Finance Corp. may close more offices or sell portfolios of loans to bolster capital, the Evansville, Indiana-based lender said today in its quarterly report.
“Our traditional borrowing sources, including our ability to issue debt in the capital markets, have remained unavailable, and management does not expect them to become available to us in the near future,” the lender said in the filing.
American General is among the assets AIG is trying to sell to repay the U.S. after taking a government bailout valued at $182.3 billion. AIG’s operating loss from American General narrowed to $154 million in the third quarter from $446 million a year earlier after the lender cut jobs and closed offices.
American General has been selling securitized receivables and reducing lending after it was cut off from funding sources. AIG, which has access to funds through a Federal Reserve credit line and Treasury Department facility, intends to support the lender through Nov. 15, 2010, the filing said.
AIG’s third-quarter net income was $455 million compared with a net loss of $24.5 billion a year earlier on fewer writedowns, the New York-based company said last week.
10,000 Jobs
The consumer unit closed 145 branches and cut 900 jobs in the first half of the year after slashing 380 jobs and closing 178 locations in the fourth quarter, according to separate filings. The third-quarter figures for job cuts and closures were derived by subtracting the first-half totals from the January-through-September numbers given today. The company has more than 1,200 branches according to its Web site.
AIG, once the world’s biggest insurer, shed 10,000 employees in the first half by selling units and cutting jobs. AIG employed about 106,000 people as of June 30, the U.S. Government Accountability Office said in September, about 8.6 percent less than the insurer’s count in its 2008 annual report.
AIG tapped the Treasury facility for $4.2 billion to help restructure its money-losing mortgage guarantor and the plane unit it’s trying to sell, the insurer said last week in a regulatory filing. The insurer accessed about $2.1 billion from its Treasury facility on Aug. 13 and said on Nov. 6 it would draw down another $2.1 billion. AIG got the $29.8 billion facility in April as part of its fourth bailout
