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Beginning of the End of An Era
The writing's on the banks' walls
"But what are the main ones, the most important ones?" I asked. She named consumer and small business, commercial banking, global corporate and investment banking and wealth and investment management.
These are the same "main businesses" the bank has chosen to locate in New York, rather than Charlotte, in recent years, the ones that will fill the offices of its new, billion-dollar skyscraper. Of course, she reminded me, the bank is leaving consumer banking -- which happens to be a prime target for outsourcing -- here.
The writing is on the wall, folks. Sure, bank CEO Ken Lewis says the bank's headquarters will always be located here. But bank executives also say a lot of things you may not read about in local publications.
"We have said for some time that we will continue to build our presence in New York City," Edward Brown, BOA president of Global Corporate and Investment Banking told New York officials in 2002 when the bank signed a decade-long lease for 180,000 square feet of office and retail space on West 33rd Street. "This lease agreement reaffirms that commitment and represents the latest example of our company's ongoing growth in New York."
The signs of disengagement are all here. There's a vacuum in Charlotte politics where bank leadership used to be. As recently as the late 1990s, "bank candidates" were still easily identifiable in local races. Today there are no clear bank candidates, minus the occasional guy who happens to work for a bank and serve on a local board. Not too long ago, politicians operated in mortal fear of crossing the Arts & Science Council, the darling baby of the bankers. Now the ASC is struggling to get funding for the next generation of projects, an unthinkable situation just a few years ago.
In New York, it's different. The bank has already thrown itself into the city's campaign to bring the Olympics to town in 2012 and helped finance the renovation of Harlem's famous Apollo Theatre. Its chairman, Charles Gifford, now sits on the board of Carnegie Hall.
"The new Bank of America Tower will be situated prominently in the Manhattan skyline, and will represent our strong, long-term commitment to New York City," PR Newswire quoted Lewis as saying last week. "This new building, in addition to our new Bank of America banking centers, underscores our plan to become an even bigger part of the New York community in the years ahead."
It's exactly the kind of thing BOA execs are no longer saying about Charlotte. It's not that these guys are going to evacuate the towers uptown next week or anything like that. It's just that they're really not growing here anymore, either. Before the bank's merger with FleetBoston Financial Corp. this spring, when it stopped giving out local employment totals, only 10 percent of the bank's employees worked in Charlotte. Since 1999, as the bank has expanded elsewhere, the bank's employment numbers in Charlotte stagnated between 11,000 and 12,700, according to the Charlotte Chamber's Largest Employer lists. At 16,000 employees, Charlotte-Mecklenburg Schools now has a larger workforce here than Bank of America.
When you consider that by 2008 the bank will own more real estate in New York than it does here, you've got to ask some hard questions about Charlotte's future as a banking center.
And Bank of America isn't alone. Wachovia's employment levels in Charlotte have been stuck between 16,000 and 17,000 since 2000, the last time the bank, then known as First Union, did any major hiring here. Last spring, after Wachovia Securities and Prudential Securities merged to form the nation's third largest brokerage, it passed over Charlotte and chose Richmond as its home, a decision that added more than 1,000 jobs to that city's economy.
Six years ago, then First Union Chief Executive Ed Crutchfield began warning Charlotte leaders that, given the volatility of bank mergers, we couldn't count on keeping bank headquarters forever. Charlotte must shore up its economy by attracting new employment sectors and landing another corporate giant, he urged.
The reality of the situation is that we remain a banking center in name because it just so happens that some local bank leaders with nostalgia for Charlotte's banking heyday have so far managed to hold on to the reins during corporate mergers. But that won't last forever. A decade maybe, if we're lucky. And that's if US Airways doesn't go belly-up or we manage to land another hub airline with enough flights to make us attractive to the large corporations that at present we're making little or no attempt to recruit.
The good news is that we still have time. That means putting aside those silly tourism schemes designed to fill the convention center and concentrating on going after the big fish Charlotte desperately needs to haul in -- and is fully capable of landing if someone, anyone, would step up to the plate.
Contact Tara Servatius at tara.servatius@cln.com
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