Local Spin: What’s in Your Wallet?
After last week, it shouldn’t be a Capital One card.
Thursday, May 10, 2012
This is what a bloodbath looks like.
One day after Capital One officially took ownership of the credit card business of Asia-based HSBC, one of the largest non-government employers in Monterey County, Capital One announced it would close the Salinas office and put 850 people out of work. That’s 850 people who, until May 2, had stable and reliable incomes. That’s 850 people with families, home mortgages or lease agreements, car loans, medical bills, tuition payments. All of them shop at grocery stores in the community, go to movies and eat at restaurants in the community and are a part of the engine that keeps the county’s economy moving.
And by the middle of next year, their jobs will be gone. If you don’t see many Capital One employees talking about it on television or in the papers, here’s why: confidentiality agreements and severance packages. You want the severance, you keep your mouth shut.
A friendly acquaintance who has worked there for years (he’s in management and signs an annual confidentiality agreement) says the impact of the closure can’t be underestimated. “I buy TVs. I buy cars. I rent nice places and I go out to dinner. It’s going to be a massive ripple effect,” he says. Capital One has left the door open for people to apply for jobs elsewhere in the company, and he says they’d be foolish not to apply and, if necessary, move out of state.
“For some people, this is the best job they were going to have and if they’re not willing to move, they’re going to suffer,” he says. “If you think there’s going to be a massive influx of these people into ag jobs or hospitality jobs, there’s not. Salinas and Monterey County can’t support a lot of these incomes.”
They can’t support his. He’s already looking at moving.
“We just don’t think enough about what happens if a major employer leaves,” he says. “There’s really nothing Salinas or the county could have done to keep them here. They don’t need us. But really, nobody owes you a job.”
Rod Powell, the county’s program manager for the Office of Employment Training, is already scrambling to reach out to Capital One workers. The city of Salinas and the county has convened a working group to address the problems the workers will face
“Ideally we would have been engaged before the announcement, but we were not at the table,” Powell says. “The working group seems to have momentum right now, and the level of attention it’s getting is good. But the block right now is communicating with Capital One and seeing how can we work together.”
The company has offered what Salinas City Manager Ray Corpuz described as a “seven figure” sum to help with worker retraining. And while Capital One says it’s planning to help workers find new jobs, that discussion is taking place internally.
Company spokeswoman Tatiana Stead told local media that Capital One’s decision to close the Salinas facility was based purely on Capital One’s business needs. Right around the time she was making this announcement, Capital One was conducting a ribbon-cutting ceremony on an already operating credit-card processing center in Sioux Falls, where 400 new jobs are planned. South Dakota Sen. Tim Johnson, chair of the Senate Committee on Banking, Housing and Urban Affairs, took to Twitter and declared “No surprise Capital one recognized SD offers an outstanding business environment & a talented, well-educated workforce.”
It’s hard to argue with Johnson on the business environment shtick. California has consistently ranked as the worst state to do business. A survey conducted by Chief Executive magazine pegged us as “the Venezuela of North America” and cites regulatory environment, corporate tax rates, income and sales tax rates and union density as all contributing to the business unfriendly environment.
For years, the environment was good enough for HSBC. Capital One reported first quarter profits of $3.7 billion. It paid $2.6 billion for HSBC’s credit card business, and the Salinas office is less than a drop in the bucket in the scheme of things.
So here’s my proposal. If Capital One no longer needs us, we should no longer need Capital One. I’m not suggesting anyone flat out close their account – that causes a hit to your credit score that takes a while to recover from. I am proposing that, if you have a Capital One card, you bring it to the Weekly’s office in Seaside and run it through our shredder. We’ll collect the shreds and send them to CEO Richard D. Fairbank, whose average salary for the past six years has reached $57 million.
Maybe it will send a tiny message: you discount us, and we’ll discount you.
MARY DUAN is the Weekly’s editor. Reach her at email@example.com or twitter.com/maryrduan. To arrange to shred your Capital One card, check out our Facebook page.