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All of those movements are largely due to corporate tax structure in the state, higher profit margins because of that, etc. I am not sure if a movement of *brain power* back to old centers coincides with HQ moving after this recession.
I suppose cities could hit a bit of a bubble and bust just like other markets if their politics and residents start to change.
It probably would make sense for most of these large banks to be in sf/chi/bos/nyc though, but maybe not. I don't have in depth knowledge of the industry, but my guess would be it is easier to recruit talent in these places as well as better access to other institutions.
BofA is not just a retail bank anymore. When it bought Merrill Lynch it was making a play to be a global investment bank as well (on par with JPMorgan Chase and Citi). No one runs a bulge bracket investment bank from anywhere but Manhattan. It's were the analysts, traders, lawyers, journalists, etc., i.e., the infrastructure of the industry is. If it moves the holding company and retail banking management to New York, it'll likely be to keep an eye on Merrill (which, more or less has to stay put).
If this were true, it'd be sad. Different cities breed different corporate cultures and tying all our financial services to one location (or two with SF) is asking for a set way of doing things. Ah well, at least financial services is one industry that has a lot of regional powerhouses.
It's a similar thing with CNN and Atlanta. Most of the high-profile reporters and employees are in the Time Warner center in New York and Washington, while the "headquarters" are in Atlanta. The Southern cities have the appeal of a lower cost of doing business, but the Northern cities have more amenities and long established communites in many industries. Recently many companies have been moving South because of the better business environment (in terms of regulation and costs), but some such as AOL (moved to New York from Virginia) are moving back.
CNN is a good analogy. The top people at Bank of America already live in New York and have been there for years. That's one reason they built that big building in Manhattan. For them to move the headquarters from Charlotte would essentially just be an address change.
I don't know about Bank of America but I do know that AT&T (8th largest company in the country) left San Antonio for Dallas but San Antonio is still doing fine. I believe AT&T still keeps close connections with San Antonio and employs a great amount of people in the area still. The cities still booming and the economy is still doing really well. In fact San Antonio is expected to be the third or fourth city to recover from the economy. I'm sure Charlotte will be fine.
This is very true. And San Antonio actually ended up seeing an increase in jobs after the move. Moving people to New York would be much more expensive than say, moving people from San Antonio to Dallas, so the AT&T scenario is a good example of how companies don't just up root masses of people and move them anymore. Not in today's information age where folks can pretty much work anywhere remotely. For folks concerned about the "stigma" of losing the title of the nations number 2 banking center, I suppose this would be a blow, but Bank of America is not going to move their 20,000 people out of Charlotte and into Manhattan, and IMO the jobs are what is most important.
B) Wachovia's HQ is still in Charlotte, despite the fact that Wachovia is a wholly-owned subsidiary of WFC.
The Wachovia brand has been absorbed by Wells Fargo (i.e. Wachovia Securities became Wells Fargo Advisors) and the merger of the two bank charters is scheduled for early 2010. Therefore, Wachovia will cease to exist as an entity. As far as Charlotte having Wells Fargo operations based there, it's been stated Charlotte will be the "East Coast HQ," which doesn't mean much. Minneapolis still has a lot of operations. Heck, the CEO of Wells Fargo is from Minnesota, most of the management and the business model of Wells Fargo come from Norwest Bank, and the stock history of Wells Fargo is Norwest's.
Last edited by BlackOut; 11-06-2009 at 12:03 PM..
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