Officials consider response to Wells Fargo closure
Michael Abramowitz and Seth Thomas Gulledge
The Daily Reflector
Thursday, March 29, 2018
Greenville and Pitt County leaders have begun to reassess their relationships with Wells Fargo Bank in swift reaction to Tuesday’s news that the mega-bank will permanently close its automotive dealer financial services center in Greenville and remove 600 jobs from the local economy.
Greenville Mayor P.J. Connelly said he was “surprised and disappointed” to hear the news.
“The city takes pride in its ability to establish business relationships and partnerships with companies that appreciate and are committed to eastern North Carolina,” Connelly said in a statement. “For this reason, we will be evaluating the city’s current banking relationship with Wells Fargo as it seems that such commitment has not been reciprocated in its decision to relocate over 600 jobs out of our region.”
A Wells Fargo communications official called The Daily Reflector on Tuesday ahead of the company’s official public announcement to say that employees have been told of the changes months ahead of the actual change. Managers have begun to meet with affected workers to talk through what corporate officials know at this point about the transition.
“Earlier today, we notified approximately 600 team members that the Wells Fargo location at 1451 Thomas Langston Road ... will close over the next six to 12 months,” said Josh Dunn, a Wells Fargo communications official in a phone call.
Wells Fargo Auto no longer will have offices in Greenville and will close two other sites in South Dakota and Delaware, according to an announcement to employees from Laura Schupbach, executive vice president and head of Scottsdale, Ariz.-based Wells Fargo Auto.
The local employees will be given an opportunity to transfer to the company’s office in Raleigh or to locations in Chandler, Ariz., Minneapolis, Minn. or Irving Texas, Schupbach said.
Glen Webb, vice chairman of the Pitt County Board of Commissioners echoed Connelly’s disappointment and said he already has conferred with the Greenville mayor on the issue.
"Pitt County takes its business relationships seriously and appreciates those corporations who invest themselves here and in eastern North Carolina,” Webb said in a Facebook posting. “I agree with (Greenville’s) position as outlined. The county will also reevaluate its relationship with Wells Fargo at our next meeting and consider releasing a request for proposals for another bank to handle the substantial finances of the local government. I would encourage other municipalities and government organizations to consider the same action."
The city of Greenville and Pitt County both use Wells Fargo for their operation accounts. According to finance officials from both, the city keeps anywhere between $5 million and 12 million in their accounts with the bank, and the county averages between $20 million and 25 million. The fluctuation in the accounts depends on the timing of tax returns and other revenue sources.
Michael Cowin, Greenville assistant city manager said that based on Connelly’s comments, staff has started researching the possibility of changing bank providers. He said that a change would not happen overnight, as the city would want to make the change as transparently and systematically as possible.
Chris McDaniel, assistant finance director for the county said he and his staff have not received any word to look into the matter. Direction would have to come from the Board of Commissioners, he said.
Cowin said regardless of the situation with Wells Fargo, he thinks it is beneficial for cities and counties to reassess their banking policy regularly, to ensure they are in the most beneficial relationship with a committed partner. Cowin said he did not know the last time the city had put out a request for proposals from banks.
McDaniels said the county has not put out such a request since the early 2000s.
Commitment to the local community would be a criteria in the selection, according to Cowin.
Pitt County Manager Scott Elliott said he was unaware of the decision and Wells Fargo’s announcement. City and county officials normally are given notice of such pending actions through the N.C. Commerce Department, which acts through legislation known as the WARN Act.
The act protects workers, their families, and their communities by requiring employers to provide 60 days' advance notice of certain plant closings and mass layoffs (500 or more). Elliott might not have received notice because the move is months away.
Schupbach told the employees in her memo that the announcement is not a formal notice. She said she will host a follow up call with teams affected by the closure to answer their questions
“Once we know more about when functions will relocate and offices will close, we’ll share that information,” she said. “In the meantime, it is business as usual and please continue serving customers as you do today.”
Once official notice is given by Wells Fargo, Pitt County will be able to activate N.C. Commerce’s Rapid Response team to assist displaced workers, said Wanda Yuhas, Pitt County Development Commission director.
“That’s something we all want to do as soon as possible,” Yuhas said. “There is significant employee and community support from that group, so we are anxious to get them involved. While these are not manufacturing jobs, the loss in the white collar service sector is regrettable. The diversity of our corporate base is one of the strengths of our economy, and this loss affects that diversity.”
Elliott acknowledged that the loss will be a sizeable one for Pitt County.
“It’s unfortunate that Pitt County is not a surviving location in their consolidation effort,” he said. “The loss of jobs and so many people and families who made their lives here will have potential wide-reaching impact on the local economy. Even if it’s a possibility for some of the families to consider relocating, it’s a major loss.”
While nothing currently exists to fill the business hole created at the Wells Fargo business site, located in the Greenville city limits near the town of Winterville, Pitt County’s economic development team will make replacing the loss a top priority, Elliott and Yuhas said.
Opportunities to locate this type company and facility come along on a fairly regular basis, Yuhas said, agreeing with Elliott’s assessment that the facility will be an excellent one to market.
“We regret the loss of this employer, but we feel confident that there will be strong opportunities to recruit a new company,” she said. “We will collaborate with the company, the (municipal) teams, the Economic Development Partnership of North Carolina and our other partners to market the facility itself for a comparable purpose.”
While Wells Fargo’s announcement took county and municipal leaders by surprise, a corporate memo reported in July by The Charlotte Observer hinted at the company’s move to centralize dealer financial services, but gave few details of what was to come.
The move came as Wells Fargo seeks to trim billions of dollars in expenses in the wake of a sales scandal that erupted over fake accounts in its community banking business, the Observer reported. Those cost-slashing plans include closing hundreds of branches, centralizing functions and cutting outside consultants.
“Wells Fargo Auto’s decision to leave Greenville is part of a broader strategy we’ve been very public about to centralize certain functions into hub settings so we can deliver improved experiences for both team members and customers,” Dunn said in Tuesday email.
Contact Michael Abramowitz at email@example.com or 252-329-9507.