Chrysler Financial to cut about 350 jobs

DETROIT (Reuters) - Chrysler Financial will cut about 350 jobs and close a customer service center near Kansas City due to tight credit and weak car sales, the financial services firm said on Tuesday.

The firm, which is fully owned by Cerberus Capital Management, said the job cuts would reduce its workforce by about 9 percent.

Chrysler Financial said it would close a customer call center in Overland Park, Kansas, at the end of August and cut jobs in other business units and at its headquarters in Farmington Hills, Michigan.

As part of the U.S. government-sponsored restructuring of Chrysler and General Motors Corp GMGMQ.PK, GMAC is taking over responsibility for providing loans to finance inventory for Chrysler dealers from Chrysler Financial.

GMAC has also taken over the financing of the low-interest loans used by Chrysler to move slower-selling inventory.

The changes leave Chrysler Financial with a reduced scope of operations. The firm continues to offer insurance to car dealerships and alternative financing for consumers purchasing new vehicles.

Chrysler Financial will also service its existing loan portfolio of about $45 billion.

Cerberus had been the owner of both Chrysler and Chrysler Financial.

The No. 3 U.S. automaker was put through bankruptcy with financing from the U.S. government and is now majority-owned by a trust fund aligned with the United Auto Workers union.

Operational control for the new automaker is with Fiat SpA (FIA.MI), which has a 20 percent stake.

(Reporting by Kevin Krolicki; Editing by Gary Hill)