We can make the Rock work again
Feb 19 2008 by Adrian Pearson, The Journal
THE new Northern Rock boss yesterday promised that regardless of the job losses expected in the coming weeks, the bank will be rebuilt as a successful North East business.
As union leaders demanded the Government avoids compulsory redundancies and North MPs called on the Treasury to put workers’ minds at ease, the new boss said he is unable to predict what happens next.
Executive chairman Ron Sandler would not indulge speculation the bank would have to make thousands redundant but committed himself to following a “robust” business plan to revive the bank’s former fortunes.
Short on details of how this could be achieved, Mr Sandler could only offer his opinion that Northern Rock would have a future as a high street lender even if it no longer followed the “aggressive” lending that eventually led to nationalisation.
“I’ve discovered a lot of very good things about Northern Rock in my first day and it has so far been a very good day, and I suspect all the days that follow will be the same. I can’t tell you how many jobs will go, you have to give me time to get to know the staff and the management and get to know the position we are in. Once I know that, then we can have an open dialogue about the size and shape of the bank.”
There were no guarantees either on company expansion at Sunderland, and Mr Sandler said he had not been in the job long enough to be able to say if any sponsorship deals would be renewed.
“What we can say is we will fund the foundation to a minimum £15m over each of the next three years. That is some measure of the respect we have for the Foundation and acknowledgement of the importance of Northern Rock in this region.”
Other welcome news from Mr Sandler, who was flanked at yesterday’s Press conference by chief finance officer, Ann Godbehere, was on the bank’s regional identity, saying there was nothing to indicate the bank would leave the North East or lose its name.
“I have not conducted any surveys that would say if the name is damaged but people I have spoken to tell me the name is far from irreparably damaged.”
And while the bank will have to be slimmed down over the next few months, Mr Sandler said he is not tasked with “running the bank down to extinction”. He said: “It’s all about stabilisation and building back to a sound solid bank. We will create a business that is profitable.”
Asked if there was big danger that this could all go wrong, Mr Sandler said he was aware “nothing is guaranteed”.
“All of the possible solutions carried with them an element of risk. That is unarguable. What the Government has decided is that this represents the best way forward. We cannot guarantee that all the objects will be met or met in a timely fashion.
“But there is a platform here upon which to move forward. Nothing that I have read or heard or seen in recent days causes me to change that view.”
Mr Sandler also made it clear it would be a matter of years not months before the £25bn in Government loans was repaid.
Newcastle East and Wallsend MP Nick Brown, who is also regional minister for the North East, said he would have preferred to have avoided nationalisation.
“This is neither mine nor the Government’s preferred outcome. The Government would have preferred a private sector solution and they have tried very hard to find one.”
Mr Brown and Newcastle North MP Doug Henderson are to meet staff representatives tomorrow as union members meet to push for greater job security. Graham Goddard, Unite deputy general secretary, last night called for a Government commitment to avoiding compulsory redundancies. He said: “We will oppose any attempt to asset-strip Northern Rock. It is vital for the North East the plans for public ownership take into account the implications for the region.”
Comment: Page 10
Analysis: Page 26
