Rock boss tells of vision for a trouble-free future
Mar 19 2008 by Adrian Pearson, The Journal
NORTHERN Rock boss Ron Sandler is today reviewing his workforce as he decides which staff members will be among the thousands set to leave the company.
The nationalised bank has to shed around a third of its 6,000 employees in order to meet EU rules on state aid.
Despite the redundancies Mr Sandler last night promised Northern Rock would return as a strong private businesses based in the North East within four years.
Most of the staff cuts will be shared between the Gosforth HQ in Newcastle and the Sunderland call centre in Doxford Park.
Around 2,000 jobs could go, though this figure does include natural waste from unfilled vacancies.
The bank has not yet promised to avoid compulsory redundancies and most of the job cuts will come this year, with the rest by 2011.
Staff working in branches across the UK are likely to escape the axe as Mr Sandler attempts to create a larger deposit base for Northern Rock while at the same time running down the bank’s mortgage book.
Customers attempting to renew fixed-rate mortgages will be advised to look to other high-street lenders, but will not be forced to leave.
And although the bank will continue to offer new mortgages, the number of customers offered a loan will come down from a pre-crisis high of around 1,000 a day to approximately 100.
Mr Sandler said: “These measures are designed to give a future to Northern Rock, to make sure that once we have repaid the Government its money and released the guarantees, we can then return the bank to private ownership as a viable stand-alone entity.
“We will continue to write new mortgages although not to anything like the level we set historically because we are a mortgage bank.
“That is our core skill and we need to preserve that.
“If a mortgage holder wishes to stay with us, that is their choice but if there are more attractive mortgages out there, we will ensure that our mortgage holders are properly advised and we will reduce the size of our balance sheet in that way.”
Mr Sandler has entered into negotiations with union leaders to set the exact level of redundancies.
“I would very much hope that voluntary redundancies are part of this process but what happens next is not yet decided and it has to be agreed with the union,” the bank boss said.
Asked how he felt the staff would respond to the announcement, Mr Sandler said: “It is not possible to know the full extent of the mood among staff but I have been talking quite widely to them since I arrived here and I think I have a reasonable understanding of the concerns that exist.
“Clearly this news is not going to be welcomed but at the same time I think most staff appreciate that measures of this nature are necessary to ensure this bank has a future.”
Newcastle Central MP Jim Cousins said Mr Sandler’s hands were tied by EU state aid rules.
“That said, the scale and speed of the redundancies is something that gives me huge concern.
“Because what is not recognised enough is that we are talking about jobs largely taken by well-educated mothers and fathers with families who can’t pack up and move away in search of work.
“The loyal staff were here for long-term careers and now we have a responsibility to find that for them.”
Minister for the North East Nick Brown has been working behind the scenes to prepare the rapid response unit which will find jobs for the sacked workers.
He said: “I’ve spoken to One NorthEast many times in the past few months in preparation for any job losses. I really feel for the people whose jobs are under threat – we will do all we can for them.
“This is not the first time we have faced mass redundancies here – we lost 3,000 in one day when they closed down ship yards. We’ve been here before and we know how to cope.”
