Banking on 'merger of equals'


SAN FRANCISCO -- In reporting the huge bonus showered on Bank of America chief Hugh McColl and the bank's huge layoffs since its takeover by NationsBank of Charlotte, N.C., news articles brought home the fact that the merger didn't accomplish its aim -- to make money for shareholders.

In the year and a half since the takeover, the bank's stock price has fallen, then fallen again, at times hovering under half of what it was at the time the two companies merged.

But much more significant for San Francisco, the old Bank of America, an institution nearly a century in the making, has disappeared almost overnight.

During the time of the "merger of equals," as it was glibly called in 1998, I was writing a book about San Francisco.

The bank and its founder, A.P. Giannini, played a thrilling part in this city's history.

It was Giannini who had provided banking services to poor and immigrant families ignored by other banks.

In 1906, after the great quake, it was Giannini who loaded his bank's cash into a produce wagon and wheeled it away from a burning North Beach, and it was Giannini who nine days later sat on a bench in the smoky air lending out that same cash so San Franciscans could rebuild their city.

The story of Giannini and his bench is as much a part of San Francisco legend as George Washington and the cherry tree for the rest of the country.

In the weeks that followed the takeover, the phrase merger of equals was heard less and less often at the downtown Bank of America headquarters, where I worked.

That's because the managers who had been reciting that phrase disappeared, leaving suddenly to "pursue other interests." The first to get the boot was our former chief executive, Dave Coulter.

Slowly, then not so slowly, the projects in the technology area where I worked ebbed away, gone to Charlotte or to Chicago, another NationsBank financial center.

The offices around me emptied out. It was a hot job market, and techies couldn't figure out why they should sit around doing nothing when headhunters were ferreting them out in their cubicles daily, waving job offers in their faces. I couldn't keep up with the goodbye lunches.

Last May, I read an article which I thought at first was in error. The writer was describing Bank of America's chief executive sitting on the 58th floor of world headquarters.

I thought, "The Bank of America building only has 52 floors."

But as I read on, I realized the author wasn't writing about San Francisco's Bank of America building. He was talking about Charlotte's! The executive, of course, wasn't Dave Coulter. It was Hugh McColl.

The innovative plan started by Mr. Coulter that awarded stock options to all employees, not just the company big shots, is still going strong. But today the options are almost worthless because of the fallen stock price.

Finally, after 18 months, I jumped ship myself and went to work for an Internet startup just a few blocks away.

As a result of the takeover, I was reminded that values other than money must be considered: Tradition, caring for others, a sense of one's place in the community and in history. All have value and must be counted. What's lost cannot be recovered.

Gail Todd is the author of "Lunchtime Walks in Downtown San Francisco" (Wilderness Press). She previously managed a group of technical writers at the Bank of America. She wrote this piece for the San Francisco Examiner.

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