Wells takeover reverses cities' fortunes
10/10/2008 12:00 AM
10/10/2008 7:08 AM
When banks in Charlotte and San Francisco merged in 1998, creating Bank of America with headquarters in Charlotte, the mayor of San Francisco called the merger “an economic crisis.”
Now that the roles are reversed, with San Francisco-based Wells Fargo winning the bid to buy Wachovia, Charlotte is looking to its former rival for economic salvation.
What a difference 10 years can make.
In 1998, the pundits wondered how the two cities and their banking centers, Tryon Street and Montgomery Street, could coexist. Charlotte had a reputation then as a rural backwater, a sleepy gay-bashing Bible Belt crossroads known for grits and stock car races. San Francisco was the den of liberalism, light-years ahead in attitudes toward gays, drugs and the arts.
“The Bank of America merger is so frightening on so many levels that's it's hard to grasp,” wrote San Francisco Chronicle columnist Ken Garcia in 1998. “The new twin cities: San Francisco/Charlotte. What a concept: pickled pigs' feet – the San Francisco treat.”
A Wells Fargo employee last week pointed out the irony in the reversal of roles, and told The Chronicle: “I'd take a transfer. North Carolina is beautiful and affordable!”
Some people around these parts still do enjoy pickled pigs' feet and grits. But over the past 10 years Charlotte has shucked its small-town image and emerged as the nation's second-largest banking center. Culturally, the city has made strides.
“I don't think many people realize how diverse Charlotte is now,” historian Dan Morrill said. An example, he said, showed up last week at the old county courthouse: a statue of Gandhi.
The biggest blow to San Francisco in the 1998 deal was to its psyche.
Not so for Charlotte this time around. Though the city could lose its Wachovia headquarters, it stands to gain much more from a deal with Wells Fargo than it would if Citigroup had acquired Wachovia.
Unlike San Francisco in 1998, Charlotte welcomed the news from the West Coast.
“There's just no better dance partner in the industry than Wells Fargo for Wachovia,” said Tony Plath, associate professor of banking and finance at UNC Charlotte. “We have talked for about 20 years about putting these two companies together. It's just a marriage made in heaven in the banking industry.”
An added plus for Charlotte, Plath said: Bank of America would be more likely to stay here with a major rival nearby. In San Francisco, some people called the announcement retribution.
“I just want this to succeed,” one reader told the Chronicle, “because it would be great to steal back from Charlotte a major bank.”
It wouldn't be the first time. One hundred and sixty years ago, the California gold rush forced Charlotte's gold mines to close.
Staff writer Stella Hopkins contributed.
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