Capital One Says ING Direct Deal Will Create Jobs While Others Say it Won't
How's this for a PR nightmare? Capital One, which recently cut 100s of jobs, now claims it plans to actually create hundreds of new jobs with its bid to acquire ING Direct USA for $9 billion. Opponents of the acquisition, say it's not true and that if you look at the bank's history, jobs are usually eliminated when it purchased banks in the past.
So who are you going to believe? As one famous news organization puts it, we report, you decide.
Capital One's announcement to buy ING Direct attracted criticism from consumer groups and competitors who warned that not only would Capital One's takeover of the online bank create another "too big to fail" scenario, but that the promise to hire was just a way to placate regulators, according to Dealmaker.
Speaking to the Federal Reserve today, John Finneran, Capital One's general counsel said that in "marked contrast to most bank mergers and current trends in our industry, Capital One plans to increase employment this year."
Capital One has said it plans to hire more than 3,600 new employees this year and that by 2013, it would create 500 new jobs in Delaware, where ING Direct USA is based. Dealmaker quotes one person with knowledge of the matter as saying Capital One might also transfer some ING jobs to other offices across the country but the employees would have the option to relocate.
Finneran's statement apparently comes as a way to counter critics who say the state of Delaware would actually be subsidizing Capital One's hiring there.
"Apparently the state government needs to pay Capital One to create jobs," John Taylor, President of the National Community Reinvestment Coalition, said in a statement published by Dealmaker, which went on to say that Capital One has a mixed record when it comes to post-takeover hiring.
After buying three regional banks before and during the credit crisis, Capital One let go hundreds of employees, including those at Chevy Chase Bank. The biggest cuts were at North Fork bank's mortgage business in California. Capital One says, however, that the ranks of its retail banking business has grown since it acquired those banks.
If it's approved, the ING Direct/Capital One deal would make Capital One the fifth biggest bank in the United States. Currently, it's number eight.