LaSalle employees warn of ripples from merger layoffs

More than 10,500 jobs in Cook, Lake, DuPage and Will counties -- including about 4,150 at LaSalle Bank -- could be eliminated in the next two years with its purchase by Bank of America, a consulting group says.

Bank of America promises to cut 50 percent from LaSalle's costs after closing the acquisition.

A report released Wednesday by the Anderson Economic Group said the potential loss of LaSalle jobs could domino onto the local economy, possibly forcing thousands of other job losses in related industries. Earnings lost were predicted to be about $780 million between 2008 and 2009.

Also Wednesday, one activist contended Bank of America has one of the worst records for serving minorities, especially with mortgages for blacks and Hispanics, and for investing in the community. Cost cuts could affect the famous LaSalle Bank Marathon and other sponsored events, the group warns.

"LaSalle had been a good corporate citizen, but Bank of America has no such record in Chicago," said Malcolm Bush, executive director of the Woodstock Institute, which promotes access to capital in minority and low-income communities. "And there's no indication they'll change unless there's pressure put on them. Otherwise, they'll run these banks from North Carolina and not be involved with communities here."

Bank of America, based in Charlotte, N.C., still is assessing the merger, and work force reductions likely will be among the cuts. But no decisions have been made on how many or what type of jobs would be eliminated or what community events will be sponsored, said company spokesman Scott Silvestri.

"Once this is over, we'll be a stronger company that can contribute to the growth of the local community," Silvestri said.

ABN AMRO Holding NV, headquartered in Amsterdam, the Netherlands, on April 23 agreed to sell its LaSalle Banks unit to Bank of America for $21 billion. The deal on Wednesday passed anti-trust approval from the U.S. Federal Trade Commission and the merger is expected to be completed later this year.

LaSalle, which has long been part of the local mosaic with 140 branches, was founded in 1936 as Central National Bank. But like many banks, it morphed over the years, turning into Exchange National Bank in 1982 and then as LaSalle National Bank in 1990 before being called LaSalle Bank NA in 1999. Other arms of LaSalle in Michigan and Indiana have about 270 branches.

The report drew its conclusions from data gathered from several sources, including federal filings by the companies. It only focused on the Chicago market, said Tim Mahon, principal at Anderson Economic Group, which specializes in economics, public policy and market research. Clients have included GM, Ford, Honda and the Detroit Lions professional football team.

The group presumed that Bank of America would distribute costs system-wide. But based on the current costs and regional headquarter personnel, the Chicago market is a higher cost center than Michigan and likely would bear the higher impact of the cuts, Mahon said.

"Wherever LaSalle has personnel, they're at risk," said Mahon.

The report was paid for by Services Employees International Union Local 1, which represents LaSalle Bank security guards. Save Chicago Jobs and Community Investment, a coalition of faith leaders, community organizations and labor unions, also on Wednesday called on Bank of America to preserve area jobs and community investments.

"When we worked with JPMorganChase and BankOne's merger, we were able to put together a six-year agreement that had goals for mortgage lending, community involved and philanthropy," said Bush. "But Bank of America doesn't have these types of relationships here. … It's not making serious efforts in the minority markets and that leaves a vacuum for the subprime lenders to move in."

Bush said they're awaiting answers from the Federal Reserve Board of Chicago on meeting with them and possibly holding public hearings on the economic impact of the merger.

Because of the possible job losses, local governments could lose more than $17 million in taxes paid by individuals, while the state could lose more than $32 million in taxes over two years, the report said.

Any discussion of job losses is speculative at this time, said Andrew Ross, spokesman for the Illinois Department of Commerce and Economic Opportunity.

"It is way too premature to discuss any potential job losses. But, in the event of any layoff, our rapid response team is always available to help any person get through what would be a difficult situation," said Ross. "The goal is to help people not only find the next job, but the right one."

When ABN AMRO bought out LaSalle, they left it alone, said John A. Challenger, chief executive officer of Challenger, Gray & Christmas Inc., a Chicago-based outplacement firm.

"Some companies come in after an acquisition with a scorched-earth policy and intend to dismantle the structure of the existing organization, while others leave things alone," Challenger said. "In LaSalle's case, it remains to be seen what Bank of America will do."