Already we have heard so many positive things about Bank of America Corp., the North Carolina-based banking giant that has agreed to buy FleetBoston Financial for $47 billion. Bank of America is the sixth-most profitable company in the United States with $737 billion in assets.
The U.S. Small Business Administration rates the company as the top small-business lender in the country.
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Bank of America is even credited with helping to finance several feature films, including “It’s a Wonderful Life” and “Gone With the Wind.”
So what’s not to like about this mega-deal?
Well, there are suddenly hundreds of Rhode Island jobs at stake. The early word from the players on both sides is that upper management, branch managers and tellers need not worry. Their jobs are supposedly safe. But no such promises are being made regarding the so-called “back office” operations, which includes such things as information technology.
And consider this: Since taking charge of Bank of America in 2001, Chief Executive Officer Kenneth Lewis has slashed 10,000 jobs.
There is also reason for concern in regard to corporate giving. Can we expect Bank of America to be as generous – as philanthropic – as Fleet has been to Rhode Island’s nonprofit community and arts organizations?
Gov. Don Carcieri said he was pleased to hear reports from Bank of America that it planned to maintain staffing levels here, but he too would like to hear guarantees.
“I think it will be some time until we understand the effect that this sale will have on our state and on the region in general,” he said. “I look forward to meeting with Bank of America officials to learn more about their plans.”
The governor is not alone. In back offices in Lincoln, where Fleet employs 1,000 workers, and in Johnston, where the company employs 500, the potential for lost jobs hangs in the air.
Richard Bove, an analyst who covers Bank of America for Hoefer & Arnett, an investment-banking firm in San Francisco, said there is no way Bank of America can maintain FleetBoston’s employment at current levels.
Bove, who described Bank of America’s past job-cutting strategy as “slash-and-burn,” estimates that 20 percent of Fleet employees will lose their jobs if the deal goes through.
Bove added that Bank of America has one of the most sophisticated customer call centers in the banking industry, and he is doubtful the company would keep Fleet’s call centers.
This situation is not new to Carcieri or Michael McMahon, the head of the Rhode Island Economic Development Corporation. They are talented and experienced business leaders. Let’s hope they will be as proactive as they can in urging Bank of America to see Rhode Island as a place to invest and grow – not cut and slash.
