Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, March 1, 1993 TAG: 9303010090
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: DANIEL HOWES STAFF WRITER
DATELINE: LENGTH: Long
DOMINION TAKEOVER OFFICIAL, BUT EMPLOYEE FEARS LINGER
THE ACQUISITION of Roanoke's flagship bank becomes official today with the signing of legal papers and other agreements. For many employees, however, the deal is far from done.
Talking to Dominion Bankshares Corp. employees these days can be an exercise in uncertainty:
Will the "displaced" - 850 in the Roanoke Valley - actually be out of work when the dust settles?
Will First Union Corp. of Charlotte, N.C., bring its credit-card operations center and 400 jobs to Roanoke? What will last Friday's news of First Union's coup in adding Washington's First American Bank to its fold mean for Roanoke as the headquarters of its Virginia bank?
What will Dominion Chairman Warner Dalhouse and Chief Operating Officer David Caudill do under the new regime if First Union's man on the scene is calling the shots?
Will a handful of senior executives envied for their severance packages - a few exceeding $750,000 in cash alone - actually collect? Or will a bureaucratic snafu throw them into the unemployment line with rank-and-file Dominion workers?
Few really know all the answers.
Firm numbers and dates saying who and when folks will be fired are hard to come by. Details on the credit-card center negotiations and Washington acquisition are sparse. Questions about "golden parachutes" gone awry receive a "no comment"; some answers are contradicted by internal documents.
Even workers at Dominion's Operations Center who've already been given end dates offer qualifiers: They're on temporary assignments; they're up for another job in the company; they might move to Charlotte.
These are uncertain days for Dominion employees - from computer programmers and systems analysts to executive vice presidents. And legal consummation of the takeover at 5 p.m. today won't suddenly clarify the confusion, officials say.
By many accounts, First Union and Dominion get high marks from workers staring at a future filled with traumatic changes.
"For me, there hasn't been much of a downside - other than that I lost my job," said Michael Trussell, vice president of investor relations. "I really haven't heard any, quote, horror stories."
With three kids and a wife finishing college, Trussell needs to find work soon - before his severance pay and savings are exhausted. "There are so many of us that will be coming out together and there are only so many jobs in the valley," he said, echoing concerns of fellow workers who want to stay in Roanoke.
Career management workshops have been held to teach resume writing, interviewing techniques and other job-hunting tricks. A "Transaction Center" for job hunters - managed by a 22-year Dominion veteran about to lose her job - officially opens today.
"I'm a displaced person - which is good," Karen Claris said while conducting a tour of the center she crafted from a vacant storeroom. "I can be very empathetic."
Computers, telephones and classified sections from Virginia and other Southeastern newspapers will be available free of charge. So, too, a fax machine, copier and laser printer - everything to wage a full-scale job search.
Last Thursday, 14 companies looking for computer programmers and systems analysts visited Dominion's operations center on Plantation Road. Trouble was, one displaced worker said, they all were from Charlotte or Greensboro.
The Transaction Center does have its critics:
"If it's real nice [but] too late, what good is it?" said a systems analyst who will lose her job April 1 - a month after the center opens. "I personally wish it had been available sooner."
Phone calls monitored
Caution and mistrust force anonymity.
Some workers still could get a second look by the new bosses, another chance to stay in Roanoke. So for all the anger and bitterness created by Dominion's sale to First Union, they don't want to be identified in the newspaper . . . because they have families.
They're not alone. Senior executives with six-figure severance packages are afraid to talk - with good reason. Several sources in positions to know confirm that for the past few months Dominion has monitored outgoing phone calls to specific numbers.
"All of my outgoing calls have been monitored," said a senior executive, explaining to a reporter that the bank's phone system is programmed to recognize calls to certain numbers. "Your number is one that's monitored."
Still, folks talk.
Employees close to losing jobs in a valley they love often are eager to reveal their personal predicament: The mother of one who wants to stay put while her teen-age daughter finishes high school; the father of two who is angry for staying loyal to a company that he thinks abandoned him; the single mother of three who worries she'll have to sell her home to make ends meet.
"All the Dominion employees, whether they're willing to talk openly or not, are feeling betrayed because they were were enticed along . . . encouraged to work together," said the single mother of one, a systems analyst.
"I hung in with them through all this, felt like I had some loyalty. But when the heat gets turned up on the directors and senior management, they bail out," said the father of two, a quality assurance analyst. "We feel the blame goes to one man" - Dalhouse.
"I think what bugged me most is we stuck through two years of salary freezes and said, `I hope they remember it,' " recalled Bill Shepherd, now a data administrator at Bassett-Walker Industries in Martinsville. "They just screwed us. They didn't care."
These employees, the people who daily processed information for an empire that spread into Washington and neighboring states during the 1980s, aren't dumb. They understand the troubles plaguing the banking industry; they understand Dominion probably would not have long survived as an independent bank.
But that doesn't make it easier.
`Sheltered' at Dominion?
Some find comfort in the stories of colleagues who've already gone to new jobs in Charlotte - long hours and increased expectations, sandwiches eaten at desks, added pressures on family life.
"It seems like what we're hearing out of First Union . . . is 12-hour days and on occasion you may have to work 16-hour days," said one systems analyst who occasionally logged 12-hour days in her eight years with Dominion.
"The feeling is, if you take a job with First Union they want your soul," a former Dominion executive said. "It's going to be a sweat shop."
First Union and Dominion officials acknowledge the company's high standards, saying employees in Charlotte work long hours because they "love what they do." Dominion's work ethic has been equally demanding, a spokeswoman insisted, depending on departments and duties.
To be fair, though: Is First Union's ethic so hard? Or was Dominion's too easy - it being "The Bank" in a market it has dominated for a century?
"Have we been sheltered if we were at Dominion? Probably a little bit," Shepherd conceded.
Dominion had a day-care center for employees, hailed as one of the best in the country. For years the company was a leading corporate citizen, supporting arts and civic organizations. Senior executives held prominent positions in the community, encouraging junior workers to pitch in, too.
First Union plans to fund the day-care center through the rest of the year - but what will happen after that is an open question, human resources officials say. Parents who lose their jobs will be allowed to keep children in the center, so long as weekly fees are paid and the center is open.
First Union is becoming one of the largest banking companies in the country, amassing an empire from Washington to Florida. It touts its corporate culture, civic leadership and economic development efforts, saying they dovetail with Dominion's historic role.
Time will tell.
`A last-minute fire drill'
There have been some inauspicious starts.
Last Wednesday, senior executive officers were summoned to individual meetings with Caudill - tapped to be vice chairman of the new First Union National Bank of Virginia - to discuss their severance contracts.
After reviewing cash payouts and benefits, Caudill individually told the executives they would be receiving letters from Woods Rogers & Hazlegrove, Dominion's local lawyers, asking the officers to waive two clauses in their contracts.
"Basically what they said is, `If you don't sign the waiver, you'll be fired Friday afternoon,' " one of the officers said, insisting he not be identified.
"If the [Dominion] board revokes the contracts before a change of control, then you're an employee at will" and can be fired without any severance, he continued. The severance packages are contingent on Dominion being sold to First Union.
After the sessions with Caudill, the executives compared notes. Worst-case scenarios abounded; some worried their nest eggs, a few worth more than $750,000 in cash alone, would evaporate.
The letters asked the executives to waive two notification clauses: One required First Union to notify contract holders of their termination date 90 days beforehand. The second required First Union to accept liability for the contracts three days before merger consummation.
"They're really nervous on this thing," the source said. "They realized someone in Charlotte had screwed up by not sending official notification."
Had the contracts been canceled before the merger date - when the contracts became binding - the executives were prepared to sue for breach of contract. A likely result: a flurry of negative talk just days after First Union assumed control of Dominion.
A Feb. 25 letter from William R. Rakes at Gentry Locke Rakes & Moore, hired last fall to represent the executives, recommended "that each of the . . . contract holders sign the agreement and return it to me so it can be delivered . . . before noon" Friday.
"It was a last-minute fire drill," one executive said.
Who's running things?
Then there were the moments in the executive suite that signaled who really would run First Union-Virginia.
One scene, as described by several sources:
First Union, in an effort to streamline operations, decided to abolish its consumer banking executive positions in all but its largest markets. That move led to a new assignment for one of Dalhouse's staunchest allies, Carol Jarratt.
Dalhouse objected, making sure Benjamin Jenkins knew it. Jenkins, moved to Roanoke from First Union's Georgia bank, is president and chief operating officer of First Union's Virginia operations.
Dalhouse was livid, said a senior executive familiar with the incident. "When he is excited, his face will get very red. He's not a yeller or a screamer. He will make some very crisp, clear comments."
Jenkins apparently didn't respond, sending a message that there was nothing more to talk about.
"I think he [Dalhouse] really felt as though he was going to have a more active role, and that is just not happening," the executive said. "He carries the title of chief executive officer, but Jenkins is making all the decisions. Warner's kept a very low profile."
Dalhouse and Caudill declined to be interviewed. Jenkins was unavailable.
A First Union spokesman in Charlotte said Dalhouse's banking experience in Roanoke and Virginia would be directed toward strategic planning and community efforts. Caudill has been charged with overseeing First Union's takeover of Dominion, and later will oversee future mergers and acquisitions.
But an internal company memorandum describing First Union's acquisition of McLean-based First American Metro Corp., announced last Friday, suggests otherwise.
The memo to "Virginia, Maryland and D.C. employees," dated Feb. 25, was sent by Jenkins and David Carroll, Jenkins' principal lieutenant. Nowhere in the seven-page document, which included a "Manager Checklist" with answers to likely questions from employees, are Dalhouse and Caudill - the merger specialist - mentioned.
Within two days after the announcement, the memo said, "First Union-Virginia President Ben Jenkins and Vice Chairman David Carroll [will] organize visits with employees of First American and Dominion in shared markets."
"If I were Dave and I had a contract with that kind of payout," one executive said, "I wouldn't stick around with a nonexistent job."
Caudill, Dominion's chief operating officer, has been widely blamed for mistakes in the late 1980s that forced Dominion to retrench and reorganize, culminating in pressure from federal regulators and the takeover by First Union.
Looking for clues
As early as this week, First Union may announce plans to relocate its credit-card center somewhere in the Roanoke Valley. Sources say sites in Roanoke and Roanoke County are under consideration.
The center could employ more than 400, and likely would rescue some 170 Dominion credit-card workers from unemployment. Valley economic development officials have been working on the project, even asking whether state training funds would be available to sweeten the pot.
Cathleen Magennis, the state secretary of economic development, said she and other state officials "have been working with top management of First Union" in an effort to land the card center.
State training funds are committed elsewhere, she said. And, in what she termed a broad philosophical statement, Magennis added: "We don't want to do anything to suggest we would incent companies to [move] into Virginia, fire our workers and hire them at a lower scale."
Sources in Richmond and Roanoke confirmed that Vice Mayor Beverly Fitzpatrick Jr. made inquiries to state officials for First Union - after he'd been told the economic development department he headed for Dominion would be eliminated. Fitzpatrick, who declined to discuss the matter on the record, has not been offered another job with First Union.
But he has friends.
Gov. Douglas Wilder wrote First Union Chairman Edward Crutchfield on Feb. 19 to "encourage you to consider seriously locating your . . . facility in Roanoke. While I know you must make an appropriate business decision, both Roanoke's loss of several hundred Dominion Bank jobs and its quality workforce are compelling factors in favor of such a location."
Wilder then made a pitch for Crutchfield to continue "the strong economic development program initiated by Dominion Bank. Bev Fitzpatrick and his team have been critically important to the Roanoke area's growth . . . ."
The coming weeks may prove crucial to a valley looking for clues to the kind of corporate citizen First Union will be. Longtime Dominion troops, from Fitzpatrick to the 34-year-old mother of three, will be watching.
"I've worked hard here at the bank and feel like I've been screwed in some ways," she said, taking a break last week from her job as a programmer analyst. "Unfortunately, this is becoming a fact of life."