We’ve talked in this space before about the passing of important figures in the business world and how they provide an opportunity to think about how things have changed, and how they haven’t.
In that spirit, then, we offer double ruminations and history lessons on two recently departed, both with local connections: Richard Cooley and Reed Larson.
A walk through downtown Tacoma in the mid-1980s would take the pedestrian past the entrances to offices of multiple banks, most of whose names were long ago lost to mergers and the occasional failure. One of those names was Seafirst Bank, at the time the largest in the state.
The Seafirst name evaporated in 2000 when it took on its corporate parent’s name, Bank of America. But Seafirst came perilously close to disappearing more than a decade and a half earlier.
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The culprit, as it usually is when a bank runs into trouble, was bad lending. Seafirst had decided to get involved in oil-patch loans made by a small Oklahoma bank known as Penn Square. When oil prices collapsed in the early 1980s, so did the oil-based economy, so did loans made into that sector and so did Penn Square. Also caught up in the maelstrom was Continental Illinois, which was the largest U.S. bank failure until — here’s one more local connection — Washington Mutual in 2008.
Richard Cooley was the former chief executive of Wells Fargo brought in to Seafirst in an effort to save the bank. The solution was to engineer the BofA deal, no small accomplishment given that Washington state law didn’t permit what was then thought of as interstate banking. The Legislature passed an exemption allowing the deal; Seafirst escaped the fate of federal takeover, and the state’s banking system and economy escaped considerable turmoil and financial loss.
Acquiring Seafirst turned out to be a good deal for Bank of America as well, because it ran into trouble a few years later with, what else, bad lending, this time in international markets such as Latin America. One of the bright spots for BofA in that period was the performance of Seafirst, buoyed by the strength of its home market.
Cooley retired from Seafirst in 1990, and died at age 92 in Seattle in September. The banking scene of today is far different from his era. The idea of a bank having its operations confined to one state is long gone; by the end of the 1980s, Washington had jettisoned restrictions, triggering a wave of buyouts. Bank of America, formerly a West Coast-based bank, grew bigger and relocated headquarters to the East Coast.
BofA also moved on to be caught up in the housing-finance debacle, in large part through its acquisition of mortgage lender Countrywide. That underlines the one thing that stays constant in banking — the need to make good loans, and what happens when you don’t.
While Cooley’s name might spark a moment of recognition among those who have tracked the local business scene over the years, the name Reed Larson might not, because he worked mainly in the other Washington and on the national political scene. His local connection is that he died in Lynnwood in September, at age 93.
One group will certainly recall Larson’s name, though, and not fondly — organized labor. Larson was the founder and longtime head of the National Right to Work Committee and its related legal defense fund, making him the leading opponent to compulsory membership in a labor union.
Right to work has never gotten much traction in Washington state, likely because of the extent of labor membership in private-sector industries including Boeing and forest products and in the public sector; the Bureau of Labor Statistics says Washington, with 18 percent of its workforce union-represented, ranks fourth among all states.
But it has gotten somewhere nationally; 26 states have right-to-work laws, and they’re not all in the South or Sun Belt; Wisconsin, Michigan and Indiana also have them.
Labor has long characterized right-to-work laws as “right to work for less” and as attacks on workers, but the fact they’re now in place in a majority of states reflects the often ambivalent and conflicted attitudes about unions and their political stances, even in supposed labor strongholds.
Labor still wields political power, especially in Washington state, and its stance on some issues aligns with that of many voters. But leadership and a sizable piece of the rank and file have split on candidates, including in the presidential race. Labor’s grip on public-sector employment seems secure, but unions in the tech sector and with many of the millennials it employs are regarded as anachronistic.
And there’s one more conclusion that we can draw about what doesn’t change. Reed Larson may be gone from the scene, but the arguments over unions’ effectiveness, necessity and usefulness will long endure.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at firstname.lastname@example.org.