Merrill's Destruction
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Interesting read as posted at “Here is the City”
There has been a lot of noise recently about a January lunch between
Bank of America CEO Ken Lewis, and former Merrill Lynch executives Dan
Tully (ex-CEO), Launny Steffens (ex-head of private clients), and
Winthrop Smith (the son of one of Merrill’s founders).
abound that the three ex-Merrill men explored the possibility of buying
Merrill back from Bank of America, and restoring the firm to former
glories. But Lewis, it seems, was having none of it, as he remains
committed to the acquisition. And Smith recently told Reuters that,
although a number of Merrill employees would like to see the firm
regain its independence, ‘I don’t see that as a reality’.
But another former Merrill executive, Bob Marrone, has written to Here Is The City expressing his views and hopes for the future of the firm. Here’s what he said:
‘As
a former Merrill Lynch executive and currently a radio talk show host,
I have been able to comment publicly on the demise of this once great
company. In addition, I have had the privilege of interviewing Win
Smith just prior to the now-famous speech he made at Merrill’s
last-ever shareholder meeting. Smith’s speech was, in some ways, a
therapy for the hurt that I, and many other current and former Merrill
employees, have endured while watching the spectacle of abjectly
selfish, mean spirited and arrogant people destroy what we, and those
before us, spent a lifetime building.
Now let me talk a bit
about the three former Merrill executives who are thought to have put
in a bid to buy-back Merrill from the clutches of Bank of America; Dan
Tully, the tough street kid who worked his way up to become CEO, Launny
Steffens, for whom I worked early in my career and Winthrop Smith,
whose name was effectively on the door, are men of integrity. They
fostered a culture of client focus and putting no individual business
unit’s bottom line ahead of the larger goals of the company’s
reputation and well being. Concepts such as ‘bringing Wall Street to
Main Street’ and ‘the customer’s interest must come first’ were not
merely introduced by the marketing department to mask other ambitions,
they were a creed, something routed deep in our belief system. It’s sad
to see how this all changed by those that came after them.
These
three men are at a time in their lives when they can enjoy retirement
in unimaginable comfort. Instead, they are now thought willing to
breathe life back into ‘Mother Merrill’. For these gentlemen, it was
never about getting rich - it was about being successful while, at the
same time, protecting the legacy and reputation of a very special
franchise. I was always proud of where I worked, and of these three
individuals when I worked for them. Not too many of my successors could
say the same.
So, if these three men ever make a play for
Merrill, I would want to be there with them. And I am sure that many
more would follow. In any case, I will continue to call on the US
government to investigate the fall of Merrill Lynch. How was our
beloved firm allowed to take on so much risk that it threatened our
country, and destroyed our legacy ? What really happened at Merrill
Lynch ? We all have a right to know’.
Bob Marrone
hosts the Good Morning Westchester program on WVOX. He spent most of is
his career in the corporate sector specialization in training and
communications. Before coming to radio, Bob set up and ran training
schools and communications functions for such organizations as Merrill
Lynch, Thomson Financial and the Securities Industry Association, and
remains on the faculties of the Connecticut School of Broadcasting and
the New York Institute of Finance.
As a BAI guy I definitely will agree with you. If BAC tries to bully their business model and policies into MER than that institution is done. Talent will leave, FA’s will leave and BAC will be left with one huge write off.
In any case, I will continue to call on the US
government to investigate the fall of Merrill Lynch. How was our
beloved firm allowed to take on so much risk that it threatened our
country, and destroyed our legacy ? What really happened at Merrill
Lynch ? We all have a right to know’.
—
LOL. The U.S. government ALLOWED Merrill to blow itself up with highly leveraged mortgage bets.
Talent is leaving, cutacheck, as the bank IS imposing its ways. ML fell because of greed and arrogance at the top. Bob Marrone should change his name to Bob Moron.
I worked for both companies, they both sucked.
MER reps…just relax breath in…breath out…and BITE DOWN…there your microchip is safely inserted. Do not eat or drink for 24 hours to give the suppository time to implant into you digestive track.
You lost your biz when you passed on the opportunity to go indy. Your lump sum retirement payout was your fractional retention bonus. Now you are owned and will be pawned.I think this will just be a cycle, 5 years from now, BAC will spin off ML on it’s own again and reap the rewards of picking it up on the cheap. Talent will leave, but new talent will come in(from UBS, MSSB etc)because wires have always played that game…
I said this from the first announcement of the merger…Merrill will be spun off and BAC will make a killing. My guess is that a private equity firm/management takes them private. But there may not be sufficient capital for a private deal out there. So only time will tell. But I think BAC has a big, fat golden goose. And eventually, BAC will go back to their core business of banking and lending.
Really, you think someone is going to come along and pay more than 50 billion for Merrill ? If Lewis had waited another 2 months Merrill would have been another Wachovia.
[quote=B24]I said this from the first announcement of the merger…Merrill will be spun off and BAC will make a killing. My guess is that a private equity firm/management takes them private. But there may not be sufficient capital for a private deal out there. So only time will tell. But I think BAC has a big, fat golden goose. And eventually, BAC will go back to their core business of banking and lending.[/quote]
Whether sold or IPO’d, I don’t see a long term integration and synergy between BofA and ML. Both would be best off focusing on their core businesses. Anyone from SB knows the supposed commonalites that were to have made SB and Citi a great fit were never fully realized and in many cases, worked against each. Their core customers are soooo different. To think BofA and Merrill will complement each other more than that is niave. ML advisors today can bank on yet another massive set of changes within 2 -3 years in my opinon.
Agreed. The ONLY way mergers like this work is when the “acquirer” opts to keep the businesses completely independant, and does not mess with the “acquired” business. Citi/SB is the perfect example, as you said. Citi compeltey f’d it up by re-branding and other crap. The “economies of scale” don’t really exist, when the only overlap you can eliminate is senior management, since that just dilutes the brand and the effectiveness. Do you really think SB (pre-MS combination) or Merrill is stronger today? Hmmmm. Don’t think so. Just a couple of departments in a financial supermarket. Sure, some people buy their baseball gloves and power tools at Wal-Mart, but “real” buyers go to d***'s/Modell’s/Sports Authority/local shop and Home Depot/Lowe’s/local hardware specialty store. And I think there is a long-term shift away from the “financial superstore” mentality.
BofA and Merrill are like Jessica Simpson and Nick Lachey. Two good looking companies on their own but put together is just not going to be pretty. Merrill will break off in 3 years max.
Oh my...BofA and Merrill are like Jessica Simpson and Nick Lachey. Two good looking companies on their own but put together is just not going to be pretty. Merrill will break off in 3 years max.
Merrill is still the top dog on the street with the best brokers and platform in the business.
They'll break away from BofA in a few years and the rest will be history.Yes, Merrill was the powerhouse because of the platform and people. But the question is… a year or 2 from now, platform and all, how many of the people who made up the ‘herd’ will be grazing in another pasture? So many already are.
BAC will never spin anything off as long as Ken Lewis is there.
Not sure how long he will be there if this mess continues..
Dan Tully has been gone for 15 years at least. I know members of his family personally. Win Smith is know by many within the firm as a crybaby and a complainer and having been passed over multiple times for promotion to Chairman. Nepotism at it’s finest. Steffens has also been out for close to 6 or 7 years I believe…what are they gonna do?? I assume they all divested most of their shares years ago. Given their connections private money would be available.
Merrill blew themselves up. Plain and simple. 32 times leverage is a MFer. The gov't had nothing to do with ML's predicament and had it not been for their closed door marrying of ML to BOA then the firm would have more than likely gone the way of Bear or Lehman anyway. It was once a proud and somewhat noble company, but those days are long gone. They won't return sadly.32 x leverage
And they give financial advice Who in the world would listen to a company like that