The Wells Fargo Wachovia Merger

I work as a senior IT Architect for Wachovia[Well, I did until today]. I have worked at Wachovia for the last 8 plus years. I have spent another almost 3 years as an employee  at then First Union before that. Plus another year as a contractor at First Union.  I have spent the majority of my career at what what was Wachovia. Big investment in my time.

I have been waiting to post this for a while, but waited until the merger was official.

Background

I left First Union as an employee in 1997. I left for a lots of reasons. I needed to grow up for sure and had let the job become too important to me. But one very concrete reason I left is that I thought First union and its management was greedy, and it did not think of its customers first. Frankly, I thought Ed Crutchfield was too big for his britches. I was partly right. I was gone for 3 years and in that time First Union went through really tough times. When I came back in 200, I had grown up, I needed a job and First Union had new leadership.

I hoped and truly believed that the new management under Ken Thompson had learned their lessons from the failures of the previous administration.  The approach to the Wachovia-First Union merger was unique to First Union, and we really put customer service in front of other priorities.  I really felt like the new Wachovia was going to be a great company to work for. 

When I joined my current area, I made a conscious decision in my mind to commit myself to my job.  As a result of leaving in 1997, I had treated my job is just that a job. My job at PMSC was a good one, but one that I could honestly do most weeks in 30 hours or less. My original job at First Union at CMG was doomed from the start, something I figured our very quickly. I stuck out out of loyalty to the person who hired me, but knew rather quickly that we as a group would at best make limited impact.

But my new job which I started in March of 2002 was very different, one that I knew could be special.  So I committed myself, allowed myself to be become emotionally engaged, to actually care deeply about the product and what I did for the first time in a while. And I have been glad that I did. Which has made the whole last few months so much harder for me at a personal level. I have been done this path but never with so much invested. Last time when PMSC/Mynd blew up, I was out the door and saw that coming.

Wachovia’s melt down – My opinion of the cause

Wachovia’s melt down to me comes down to two things really. First is greed. Ken Thompson, desperate to go out West and wanting some of the mortgage riches, bought the wrong company at the wrong time. And from what I know Wachovia did not do two things. It did do the proper due diligence on Golden West. If it had, some of the problems that have come up would have surfaced. Second, people in the line of business were ignored.  I truly hoped that Ken Thompson and the board had learned their lessons from the Corestates fiasco. But they did not.  They bought the wrong company for the wrong reasons. We are hearing rumors that Golden West hid from Wachovia at the time some of the issues. This is a serious case

The Second is that once we bought Golden West, the legacy Wachovia was not allowed to really run Golden West. If we had, we would have uncovered the mess earlier and maybe gotten ahead of some of this. But we were told to back off. The Sandersons keep saying that Golden West is not what brought Wachovia down. Well, if we do not but Golden West and Golden West beats Indy Mac and WAMU to the bankruptcy window. Golden West was the literal Trojan horse virus. 

My old boss, Joe Monk, left Wachovia, just over a year ago. I loved working for Joe. He was always challenging us to be better, to do better and to be leaders. He wanted us to be on the vanguard, taking the calculated risks to make Wachovia a better company. And when the whole Golden West deal, with him losing Mortgage to a new CIO, and then his own person not getting that job, pushed him out the door. It was a bad day for Wachovia.  I blame that or Martin. Totally.

The Meltdown

Wachovia’s meltdown will go down in history as a curious case study.  IMO, Bob Steele did the best he could, while holding lousy cards and apparently not in the right circles. I think it was criminal that the US government basically decided that Citi should succeed and Wachovia should not.  Not the market, but a couple of people in DC.

Could we have survived if we got the bailout? Probably but wounded.   But still, we could have survived.

The day it all went down, that week was just surreal. I woke up at 4am on Monday, well aware that Wachovia’s fate was on the hook. I watched the early new, put on a Wachovia shirt while we were still a company. By the time I got into work, the news that Citi was buying Wachovia was out. I ran into some colleagues in the cafeteria and we talked for an hour. I went upstairs, knowing that the day was shot.  The saga of the last three or so weeks had come to this. We start hearing some things, had a conference call with senior management. By 2, I was so emotionally exhausted that I went home and went to bed. The day was that overwhelming. I have never done that before BTW.

That week was just surreal. By Wednesday, we are hearing more about Citi and what it means. Friday I walk in and Wells is back in. And I see the same colleagues, same table in the cafeteria and we talk. the next few tow weeks we wait to see our fate.

I could not tell if we were the fairest at the ball that two suitors wanted or just the next fat piece of meat that two shoppers were arguing over who got it.

The aftermath

Wachovia has been bought. Pure and simple. We were on the other side of the coin. Everyone around was worried about our jobs. although Wells came into Charlotte with a great message, it was still up in the air.

Personally, I was tapped to work on a merger documents very early and was really busy in late October and November preparing architecture models for initial meetings between Wells and Wachovia. it was really good to be busy. From there, I have been paired up with tow Wells guys in Minnesota working on early SOA integration perspectives, while reconciling our two XML standards. They are really down to earth and easy to work with. We have a couple of rough patches but nothing that was impassible. We have shared openly and quickly developed a real working relationship.

But I believe that I was a real exception. The overall lack of information was appalling and frankly I felt really poorly lead by Enos and Davis. This is the time to over communicate, share what you are seeing, and be candid. We have gone many weeks with little or no information. plus the reality is that so far the vast majority of  leadership positions have gone Wells.  The IT org has Wells firmly in charge and I anticipate that I will be working for a Well CIO very soon.

The system selection is due in about three weeks and this will be the real telling point. If we select the core SORs from Wells, then I think much of the current org that I reside in will slowly disappear over time.  Many people will either retire or be let go.

Even so, much of the hard work I have done in the last 6 years is surely heading away. Hard to swallow but it is the truth.  I feel confident that many of the channel solutions that I have worked on in one fashion or another will be sunset.

The Future of banking in Charlotte and me

I decided in mid-November that I wanted to at least try on the Wells coat and see if it fits. It most likely means at minimum having a new boss in another city. Been there, done that and understand the challenges. There is both freedom in that (with a blackberry I can work just about anywhere) but many challenges (the ability to sit down casually and share ideas and concepts is not there).  I will have to work extra hard in the next two years to establish my credibility again all over. It is part of the deal, whenever you walk into a new situation you have to prove yourself all over,resume be damned.

But I have lived here 18 years, have deep roots in the area, my family is deeply engaged in the community. Would I move? Sure. My wife has already found a house in Minnesota she likes. But I really want to stay.

I will say this unequivocally: I am very hopeful for 2009, the first time I can say that in 2 to 3 years. I knew 2008 was going to be hard, and it was much harder than I could have ever guessed. But I think in many ways what legacy Wachovia needed was a kick in the pants. And we got that. The new Wells as a company may be well positioned to be a powerhouse.

I also believe this: with GMAC and Merrill Lynch both becoming banks, they will start up the retail operations in Charlotte, most likely in South Charlotte. I would suspect that in ten years Charlotte’s role as the retail banking center of the US may be enhanced. There is strong working capital in this city to do that, a continued pro-business climate, and relatively inexpensive wages.