With the banking battle for Wachovia over, Charlotte's focus turns to the bank's roughly 20,000 local jobs.
The news Thursday evening that Wells Fargo is proceeding with its purchase of Wachovia brought relief for employees and area leaders. Yet it raised new questions and concerns in a city where banks historically have gobbled up competitors, not faced collapse or been targeted by rivals.
While bids for Wachovia by Wells and Citigroup indicated where certain divisions could end up in a takeover, neither deal provided specifics on jobs, and it was unclear which would preserve more positions in Charlotte.
Wachovia executives and many employees favored the Wells deal, in part because they expected the San Francisco-based bank – which doesn't have an East Coast presence – to keep much of the Charlotte operation intact. That prospect had Tony Plath, a UNC Charlotte finance professor, praising Thursday's announcement.
“It keeps us a center of retail banking,” Plath said. “A thousand-pound rock has been lifted from the city of Charlotte.”
Others, though, were more cautious, saying that the withdrawal of Citi's bid doesn't reveal how many employees will remain in Charlotte.
Mayor Pat McCrory said Wells chief executive John Stumpf called him last week after the deal was first announced. “He gave me very positive signals about their commitment to Charlotte. He was extremely high on Charlotte and the resources available.”
On specifics such as jobs, however, “we're going to have to be patient,” McCrory said.
Former Wachovia executive Mac Everett, now executive chairman of the Wachovia Championship PGA Tour event, said he knows Wells Fargo as a strong company.
“As for Charlotte,” he said, “who knows? I think the Wells Fargo people are community-oriented and have proven that. So I think it's the very best we could have expected or hoped for.”
Stakes high for Charlotte
At the very least, Wachovia employees, shareholders, customers and others now know which bank would be in control after almost a week of dueling bids, legal squabbles and closed negotiations.
The stakes are painfully high: Wachovia is Charlotte's second-largest employer, with about half of its roughly 20,000 Charlotte employees at a 2million-square-foot center in University Research Park and most of the rest in uptown.
The bank occupies nearly 2.8 million square feet in eight uptown buildings and is building a 48-story, 1.7 million-square-foot building at Tryon and Stonewall streets. Real estate brokers say it's unclear how much of that space Wells might need.
Wachovia also is an anchor for Mecklenburg County's finance and insurance industry. That sector accounted for $5.6 billion in county wages last year, or one-fifth of all private-sector wages – far outpacing any other industry.
Such was the result of several bank mergers in which Wachovia and Charlotte's other banking behemoth, Bank of America, were the aggressors, gobbling up smaller or weaker institutions across the country. That track record made Wachovia's downfall this year all the more stunning.
Even more perilous in the war over Wachovia was the potential domino effect. With Bank of America expanding its presence in New York and recently making a deal to acquire brokerage Merrill Lynch, some financial experts speculated that it could shift even more operations to New York if Wachovia were gutted, cutting into Charlotte's critical banking mass.
Now, Plath said, “Bank of America is far more likely to keep the headquarters here if there's another competitor down the street from them.”
A bit of certainty, at least
Business leaders are taking nothing for granted, however.
Like McCrory, Bob Morgan – president of the Charlotte Chamber – said he spoke briefly with Wells Fargo executives, hoping to build a relationship that will result in the current Wachovia work force remaining largely intact in the region.
“There's a labor force here that knows how to run a bank, there's a cost of living that is 94 percent of the national average, and there's real estate,” Morgan said.
“I was holding out hope that Wachovia would find a way to remain independent, but that wasn't realistic,” he added. “We're in extraordinary times.”
Everett said he's happiest for the employees, who have endured several days of not knowing whether Citi or Wells would win the banking brawl. “They have some certainty about where the company's going,” he said.
“These people have been in limbo for two weeks now,” said Everett, who also is the interim CEO of United Way of the Central Carolinas. “It needed to come to a resolution one way or another so people can get on with what they do best, serving the customer and running the company.”
Since the Wells bid emerged last Friday, many Wachovia employees have championed that deal as better for them and their future in Charlotte. That sentiment remained Thursday evening.
“I am glad to hear it,” said Rozell McRavin, a Wachovia employee for 12 years who now works in the retirement and investment product group. “More jobs are going to stay here.”
Just knowing that the duel between Wells and Citi is over should make many Wachovia employees breathe a little easier, McRavin said, especially in an increasingly tough economy.
“The unknown makes you just wonder,” she said. “Now we can make plans.”