Ed Crutchfield a Visionary? Are You Kidding?
This just in from the You-Can’t-Make-This-Stuff-Up Dept:
When the Charlotte Center City Partners called former First Union CEO Ed Crutchfield about honoring him with this year’s Vision Award, it brought back a lot of memories.
Memories of working with other civic leaders to build the Charlotte we know today, Crutchfield says.
Helping build a charity hospital into Carolinas HealthCare System. Strengthening the school system. Landing professional sports teams, the NBA’s Hornets and then the Carolina Panthers. Seeing Charlotte Douglas International Airport turn into one of the busiest in the nation. Running United Way campaigns. [Emph. added.]
Oh, please. Ed Crutchfield’s “vision,” if one can call it that, consisted of diluting his shareholders again and again, via one deal after another, in order to build a banking empire that, at its height, was a monument to big-bank dysfunctionality. The old First Union couldn’t do anything particularly well. After 90 or so deals starting in 1985, Crutchfield’s megalomania culminated in 1998 with First Union’s acquisition of Philadelphia’s CoreStates. At the time, the CoreStates deal was biggest banking merger in U.S. history; it ended up embodying the Crutchfield m.o. writ large. The integration was rushed, back-office systems didn’t work, and customers left in droves. Planned cost savings failed to materialize. Billions in shareholder value went up in smoke. Oh, but Charlotte has a pro basketball team now. Thanks, Ed!
Ed Crutchfield’s leadership at First Union didn’t enrich anyone-certainly not his long-term shareholders-except Crutchfield himself and his cronies in the executive suite. Worse, his legacy of acquire-no-matter-what doomed the bank in 2006, when then-CEO Ken Thompson decided it would be a good idea for Wachovia (First Union’s successor) to buy Golden West Financial. You know what happened next.
For this Ed Crutchfield is being hailed by Charlotte’s city fathers as a visionary? They must be delusional! He built a corporate monument to himself on the backs of his shareholders, and left behind an institution whose culture virtually assured it would eventually self-destruct. That’s not a legacy anyone should want to leave behind. I’m surprised the people in Charlotte actually want to honor him for it.
What do you think? Let me know!
16 Responses to “Ed Crutchfield a Visionary? Are You Kidding?”
Relax Tom. It was a civic award not the ABA. On the other hand the pro basketball team has lacked vision so maybe you ate right!
They gave the award to Hugh McColl a few years back…now it was time for Eddie! A very good choice for this honor. He helped put Charlotte on the map.
You are spot on…he also presided over the current and former employee lawsuit under ERISA section 404(c) in 1994 after they bought Signet Bank in Richmond, and fired independently chosen investments in the 401(k) with the Evergreen underperforming brand they owned, further showing employees the love. Case was settled, arguably in the banks favor, for a mere $26 million, $8 million of which went to the plantiff’s lawyers.
Remember the stories about how he threatened to fire employees who used the internal voice mail system. He hated technology…probably still carries a bag phone from the early ’80′s.
Nothing beats his mentoring of Kennedy Thompson, the brilliant nothing head who blew a $26 billion cash black hole in the shareholders’ butts in 2007…Only one dumber was former NC State treasurer, Richard moore, who insisted on CNBC Wachovia was worth $24 when it was trading at cigar butt prices in September 2008.
I couldn’t agree more. However, I know you cover banks, but a lot of CEOs in other industries did the same thing. It was about one goal. Getting bigger for biggers sake. And for that, a lot of good people lost their jobs. I hope there is a special place in hell for these “civic leaders” or I should say parasites.
Vegasjoe, great post. I’m a long time Charlotte resident & legacy Wachovia banker. It was hard to believe that fast Eddie Crutchfield was suceeded by a CEO who was more incompetent than he was. The only way for the Vision Award to be any more diminished will be when its recipient is Ken Thompson.
Tom, here’s his quote leading the article in that will probably agitate you even more, if you didn’t catch the first time around……Posted: Friday, Apr. 19, 2013
“Had Ed Crutchfield stayed CEO a few more years, he says he might have bought Wells Fargo himself.”
Read more here: http://www.charlotteobserver.com/2013/04/19/3992529/crutchfield-relieved-by-how-wells.html#storylink=cpy
JEFF WILLHELM – jwillhelm@charlotteobserver.com
one should be careful whenever you hear the phrase “visionary” especially when it involves bankers. There is something about banking that breeds that term. Banks were like the neighborhood hardware store, pharmacy, car dealer, etc. They served a purpose in the community and were a key to commerce. And then someone had the bright idea of rolling them up and creating holding companies and all of a sudden, “visionaries” were born. Most city bank Presidents quit being bankers and became “visionary leaders”. They stopped making loans, moved up to the holding companies and left the mundane “chore” of banking to the underlings. They built swank offices or even worse, towers, and emblazoned their “visionary” corporate names atop these towers across the state or across regions. They paid consultants to come up with “visionary” names for their new empires. They bought corporate jets and flew over the cities so they could see their towers with the logos embossed on top. Bigger was better. Customers? “Oh I stopped dealing with customers years ago. I deal with investment bankers, Wall Street analysts and image consultants.” The bank (it could have been the car dealer or pharmacy) became secondary. What mattered was the “visionary” leadership, teaching classes and speaking at conferences on how your leadership energizes your employees. Some wrote books. Others got businesses schools named after them. They led Chambers of Commerce, were close with Governors, held sway in State Houses, raised money for Presidential candidates and joined exclusive Country Clubs. Some ran University athletic departments and hired/fired football coaches. They spent money recklessly to advance their vision and build their cities to match their swagger. It wasn’t just enough to build a “world-class” company or erect a statement-making tower, you had to also take on solving an entire City or Region’s woes and make it “world-class” as well.
But very few of them were bankers. Most
one should be careful whenever you hear the phrase “visionary” especially when it involves bankers. There is something about banking that breeds that term. Banks were like the neighborhood hardware store, pharmacy, car dealer, etc. They served a purpose in the community and were a key to commerce. And then someone had the bright idea of rolling them up and creating holding companies and all of a sudden, “visionaries” were born. Most city bank Presidents quit being bankers and became “visionary leaders”. They stopped making loans, moved up to the holding companies and left the mundane “chore” of banking to the underlings. They built swank offices or even worse, towers, and emblazoned their “visionary” corporate names atop these towers across the state or across regions. They paid consultants to come up with “visionary” names for their new empires. They bought corporate jets and flew over the cities so they could see their towers with the logos embossed on top. Bigger was better. Customers? “Oh I stopped dealing with customers years ago. I deal with investment bankers, Wall Street analysts and image consultants.” The bank (it could have been the car dealer or pharmacy) became secondary. What mattered was the “visionary” leadership, teaching classes and speaking at conferences on how your leadership energizes your employees. Some wrote books. Others got businesses schools named after them. They led Chambers of Commerce, were close with Governors, held sway in State Houses, raised money for Presidential candidates and joined exclusive Country Clubs. Some ran University athletic departments and hired/fired football coaches. They spent money recklessly to advance their vision and build their cities to match their swagger. It wasn’t just enough to build a “world-class” company or erect a statement-making tower, you had to also take on solving an entire City or Region’s woes and make it “world-class” as well.
But very few of them were bankers. Most
It seems pretty clear to me that part of shareholder’s loss was Charlotte’s gain. As Ed made dilutive acquistions, he swept corporate functions into Charlotte, which benefited greatly from the explosion of employees at HQ. You might have noticed that downtown Chartotte’s skyline was transformed by two banks with similar attitudes towards dilutive acquisitions. From the city of Charlotte’s point of view, Ed Crutchfield is a hero. From the shareholder’s point of view, well, that is another story entirely.
For once you hit it on the head and hard. The cronies in and the filtered out from Charlotte were nothing short of politicos. It was an institution based totally on who you knew, not how good one was, ones experience, what one could really bring to the table in terms of past accomplishments, experience, direct market knowledge, customer and prospect knowledge. They kept and promoted some real bummers and let some very talented individuals go. Tom forgot to mention Ed’s $2 Billion purchase of The Money Store (a Mr. Coffee anyone?) around 1999 and then a little over a year later its complete shut down and the write-off of the $2 Billion. On acquisitions their upfront due diligence was horrible, horrible. Of course Wells Fargo kept the one individual introduced the “Future Bank” kiosk concept in the branches upon the acquisition of Core States — and that went up in a flame ASAP. Ken Thompson probably used the acquisition of The Money Store as his template for the acquisition of Golden West. Unbelievable and forgettable legacy!
Never got over that “little red-headed boy” comment, did you Tom?
Tom,
Only criticize Fast Eddie as much as you are willing to criticize yourself. 2/20….keep getting rich off the herd (is it getting smaller?). Go, go, go……
One question. A vote today reminded me to ask you. When a company does poorly do you vote against a revision to its stock bonus plan with the option exercise price lowered, or do you vote for? As far as i’m concerned a stock option is a bonus for reaching or exceeding a certain bar height of achievement. Why should i reward a bonus for achieving a lower height than originally agreed to? For the position, even if there’s a personnel change for that position. Job incentive? Job incentive should be the natural desire and challenge to do a good job and the natural desire to keep one’s job. That’s how i looked at it when i got stock options. Just an extra that really didn’t mean much to me as a spur to performance.
Amen!
The cigarette smoking man who bragged about acquiring small banks using write off accounting to make paying 5 times book value work out ok. In the world of finance, where nearly all the experts are nearly always wrong, he would be the perfect award recipient for this type of thing.
Fast Eddie was a charlatan and a phony. He really should have done jail time.
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