BofA’s Rosenberg Vows Fairness to SecPac Staff : Banking: The chief executive says the merged company will pick the best people available, regardless of which institution they came from.
BankAmerica Chief Executive Richard M. Rosenberg, seeking to ease growing fears of Security Pacific employees, promised Friday that BankAmerica won’t play favorites in picking workers for the merged institution.
In an interview at BankAmerica’s headquarters, Rosenberg insisted that “there is anxiety on both sides” because all candidates for jobs in the new organization are being screened closely.
“I can’t emphasize this too much,” he said. “We are really knocking ourselves out to try and find at both companies the best person for the job in the new company.”
Bank experts estimate that the merger will result in 10,000 to 20,000 layoffs. Rosenberg, who would not specify how many jobs will be cut, conceded that anxiety is clearly highest at Los Angeles-based Security Pacific Corp.
Rosenberg said there are two main reasons: First, a disproportionate number of BankAmerica Corp. computer systems have been selected over Security Pacific systems, which gives BankAmerica workers in those areas a clear advantage in hiring. Second, jobs at the new bank will be heavily concentrated in San Francisco, and many Security Pacific workers may not want to move.
Rosenberg said many organizational decisions are still being made. But he added that a strict clamp on hiring--he has to personally approve the hiring of every new BankAmerica officer worldwide--will create “hundreds of jobs on Day 1,” when the banks combine.
The deal effectively involves BankAmerica acquiring Security Pacific in a stock swap valued now at $4 billion. It will create the nation’s second-largest banking firm behind Citicorp.
Shareholders of both banks overwhelmingly approved the deal Thursday, but Federal Reserve Board and Justice Department approvals are needed.
On Friday, the Fed ordered hearings in Los Angeles, San Francisco and Seattle to review how well the banks have been meeting the needs of low-income and minority customers, even though BankAmerica has received the highest marks possible from regulators. Dates for the hearings have not been set.
Rosenberg declined to elaborate on BankAmerica’s negotiations with the Justice Department on antitrust issues, but he said he doesn’t expect major problems. BankAmerica has identified about $4 billion in deposits, mostly in branches in Washington, Arizona and California, that it is willing to sell to ease antitrust concerns.
“I don’t see any major roadblocks,” said Rosenberg, adding that some details may need to be “fine-tuned” to meet government concerns. He hopes that the merger can be completed by April.
While expressing concern about the ailing state and national economies, Rosenberg said the merger makes more sense than ever, in part because banks are under growing pressure to cut costs with loan demand slackening. The two banks have estimated annual cost savings after three years of $1.2 billion.
Rosenberg said BankAmerica officials have put extensive study into Security Pacific’s hard-hit loan portfolio. To illustrate his point, he rose from a table, walked into his office and came back carrying a five-volume, foot-high stack of notebooks that represent BankAmerica’s “due diligence” evaluation of Security Pacific loans.
“Believe me, I read these on weekends,” Rosenberg joked. But he added, “I sleep well knowing what the problems are.”