Let’s see if I’ve got this right. If you are one of a handful of tellers at a Fleet branch – maybe on Hope Street in Providence or Willet Avenue in Riverside or Newport Avenue in Pawtucket – you should feel pretty good about your job in the wake of Bank of America’s $47 billion buyout of Fleet.
But if you are one of the 1,000 workers at Fleet’s call center in Lincoln or one of the 500 workers at the technical support center in Johnston, or one of the 300 workers at the mortgage operation in East Providence and you look up and there isn’t a customer standing outside of your cubicle, you probably aren’t feeling very secure about your job.
While Bank of America and Fleet officials are saying all the right things – the things all of us want to hear – the general consensus seems to be that Rhode Island is likely to lose a lot of jobs when all is said and done.
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Neil Steinberg, chief executive officer of Fleet Rhode Island, told Providence Business News that Bank of America was committed to keeping all of Fleet’s existing “customer-facing” employees in New England.
That sounds rather ominous.
Gov. Don Carcieri and Michael McMahon, the executive director of the Rhode Island Economic Development Corporation, now have a chance to work some magic. And their trick is to find a way to prevent hundreds of jobs from disappearing.
The governor clearly knows what is at stake. He and McMahon are trying to create 20,000 good new jobs in Rhode Island. Subtracting several hundred will only make that challenge even more difficult.
“We realize that consolidation and globalization are absolutely part of the landscape and we’re not going to turn back that wave,” McMahon told us last week. “Instead, we need to make sure we have a trained work force and a user-friendly government so we can get on top of that wave, instead of getting crushed by it.”
Let’s hope they come up with something because losing hundreds of Fleet jobs
would indeed be a crushing blow.
Prudent response to Putnam
General Treasurer Paul J. Tavares acted prudently on Oct. 31 when he terminated the state’s relationship with Boston-based Putnam Investments.
The announcement came after the State Investment Commission voted unanimously to cease all current business with Putnam during a special meeting at the State House.
As one of 14 investment managers employed by the SIC, Putnam managed $690 million of the $5.8 billion Employees Retirement System of Rhode Island fund, having been hired by the state just two years ago.
Putnam has been in the headlines of late for dubious reasons. The Securities and Exchange Commission and federal regulators have charged the company with civil fraud. Federal and state authorities are investigating the circumstances of alleged incidents of “frequent mutual fund trading.”
A series of departures of key employees – and a year in which it saw several of its funds under-perform – have also rocked the investment giant, in the wake of the burgeoning scandal.
In the days prior to Rhode Island dropping Putnam, New York, Massachusetts and Vermont had already fired the company. Pension funds in Pennsylvania and Iowa dropped Putnam soon after Rhode Island did.
For its part, Putnam has denied the allegations. But Tavares and SIC members have been unmoved by the company’s explanations for its troubles.
“We take our fiduciary responsibility extremely seriously and felt it was necessary to take immediate action,” said Tavares.
With so many key executives having bailed out on Putnam, Tavares basically said that the bond of trust between the state and the company had been broken.
Putnam Investments deserves – and will get – its day in court. The company will have every opportunity to explain itself and to begin rebuilding the relationships that have been broken.
But Tavares and the state officials who manage the state’s pension fund are under no obligation to wait for that to happen.
These, after all, are taxpayer dollars and to pull them out of harm’s way is simply the right thing to do.
Pensions are personal. To Putnam Investments, losing the Rhode Island business may not be a big deal. But for a retiree reading the national news, the recent reports on Putnam Investments would be nothing short of chilling.
Tavares said there is always the chance that the company could be rehired in the future. That’s fine. But he and the SIC members are right to let them work things out – with someone else’s money.
