Wachovia has had a rollercoaster week, and many others in Charlotte have joined company employees and shareholders for the ride.
The struggling bank on Monday agreed to be brought for about $2 billion by New York-based Citigroup, which planned to break Wachovia apart, potentially costing Charlotte thousands of local jobs.
On Friday, however, Wachovia and Wells Fargo of San Francisco struck a roughly $15 billion deal that suggested the West Coast bank would keep most of Wachovia's Charlotte presence intact. Citigroup soon afterward said the Wells Fargo deal violated an exclusive agreement between Citi and Wachovia.
If they hadn't seen it themselves, some local business leaders said the turn of events in just a few days would be impossible to imagine.
“It's just been a wild week,” said Ronnie Bryant, president and CEO of the Charlotte Regional Partnership. “I've never experienced such a whirlwind.”
“This is unprecedented,” said Bob Morgan, president of the Charlotte Chamber
Steve Luquire, president of the Luquire George Andrews marketing communications firm, did Morgan one better. “Unprecedented is an understatement,” he said.
When Citi's bid was announced Monday, the prospect of Wachovia being broken into pieces led some employees to consider their options. Wachovia's workforce is loyal, one sales support employee said Friday, but it made sense to have a resume ready if and when Charlotte positions were eliminated.
“Why wouldn't you?” said the employee, who didn't want her name used.
Tony Almeida, a vice president at Duke Energy, said his co-workers who have spouses at Wachovia were bracing for the loss of half their household income. “It's clearly been an emotional week,” said Almeida, who also serves as chairman of the Charlotte Regional Partnership.
Wells to the rescue?
Amid the grudging acceptance of job losses and scrambling by Charlotte leaders to persuade Citi to keep positions in town, Wells Fargo – with its stagecoach logo – came riding to the rescue. Or so it seemed.
The new deal was barely announced early Friday before praise began to flow. Charlotte “dodged a bullet,” said UNC Charlotte finance professor Tony Plath said in a statement. “These banks are made for one another,” he said. “A great combination.”
Employees seemed to agree, high-fiving each other in hallways. Even those leaving company were happy.
Michael Eberhardt, an analyst with Wachovia Securities, said his job already is moving to St. Louis as part of the bank's 2007 merger with the A.G. Edwards brokerage firm. He plans to look for a new job in Charlotte, he said, and a Wells Fargo merger would help by producing fewer layoffs than the Citi deal.
“Now I know I won't have to compete with 20,000 other people” for a job, Eberhardt said.
‘Taking it in stride'
By mid-morning, though, Citi had struck back by challenging the Wells Fargo deal. At the Wachovia Atrium off South Tryon Street, employees began reining in their hopes. “Taking it in stride,” one administrative assistant said of the looming battle for the bank.
At Mimosa Grill near the Atrium, the afternoon crowd included one employee who said he was just tired of the whole situation. The people in charge were making the decisions, he said between sips of his Yuengling beer, and everyone else just had to live with it.
Business leaders also began bracing for a bicoastal tug of war for Wachovia.
“We do not know if we're in the third inning or the eighth inning of this game,” said Morgan, the Chamber president. “It's time for all of us to draw a deep breath. Clarity is going to take time.”
What was clear, however, was that Wachovia – and by extension the Charlotte business community – had just endured a hectic few days. And this on top of Bank of America's deal to buy Merrill Lynch a few weeks earlier, the area gas shortage and debate in Congress over the $700 billion bailout.
As the head of business recruitment organizations – in Charlotte and elsewhere – Bryant said he has seen plenty of company moves and mergers, but “nothing this dynamic.”
“We've had companies announce when they're been purchased or are leaving,” he said. “But not this much uncertainty.”
Like many employees, business leaders generally favored the Wells Fargo deal as better for Wachovia and Charlotte.
“It would probably be a better strategic fit,” said Nelson Schwab, managing partner of the Carousel Capital private investment firm. By comparison, Schwab said, the Citi bid “was pretty much a slash-and-burn, and pretty devastating to the city.”
But after a tumultuous week, Charlotte will have to wait even longer to see what happens. Local leaders are ready to pitch Charlotte as an ideal business location, Morgan said, but that dialogue depends on who ends up buying Wachovia.
“We don't know if it's a blow or it creates opportunity for us,” he said.