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Cloistered Clausen Plots Comeback of Embattled B of A

November 16, 1986|VICTOR F. ZONANA | Times Staff Writer

SAN FRANCISCO — Shortly after rejoining BankAmerica as chairman and chief executive last month, Alden Winship (Tom) Clausen told the ailing company's communications chief that one of his goals was "to make this company boring."

So far, he has not had much success.

Since Clausen took over, the woes of BankAmerica--parent of Bank of America, the nation's second-largest bank--have been splashed all over the world's business press as the company tries to thwart unwanted takeover bids, stem massive losses and raise cash by lopping off one unit after another.

The relentless media scrutiny has come despite Clausen's hard line against unauthorized contacts between bank officials and journalists.

"It's like Nixon's White House around here," grumbled one bank official, who contended that he would be fired if he were caught cooperating with reporters.

Clausen--who headed BankAmerica during its glory years in the 1970s and whose father, ironically, published a small newspaper in Hamilton, Ill.--declined to be interviewed for this article.

"Top management is not entertaining interview requests, period," a spokesman said. Clausen has held just one news conference since becoming chairman on Oct. 12.

In some respects, the 63-year-old banker's bunker mentality is understandable. During Clausen's five-year absence from BankAmerica from 1981 to 1986, when he ran the international development agency known as the World Bank, BankAmerica went from being the envy of the banking industry to its most prominent basket case.

Its portfolio includes $5 billion in problem loans and foreclosed real estate; its management information systems are so woefully inadequate that they allowed a $640-million second-quarter loss to go undetected this year until the quarter's final days, and its travails are driving away some of its best and brightest employees.

The new stone wall that has been erected around top management is just one of the changes that has occurred at BankAmerica since Clausen retook the top job from his one-time protege, Samuel H. Armacost.

Other developments include a new willingness to shed subsidiaries and other assets considered sacrosanct by Armacost, a relentless campaign to slash expenditures by $450 million annually and renewed efforts to retain and expand market share in the company's "core" businesses.

Friday, Clausen announced a restructuring program designed to shed $10 billion in BankAmerica assets and boost the company's net worth and capital ratios by the end of 1987.

Clausen himself is said to rarely venture from his 40th-floor office in the granite and glass headquarters tower here that BankAmerica had to sell last year to raise needed capital.

He prefers, instead, to hold one-on-one sessions with his financial and legal advisers and with key deputies, who relay his orders to the troops.

"It is a very tight circle," one BankAmerica official said. "If Clausen is in the bunker, it is because he believes that the company is at war," the official added.

Clausen may be right. From without, BankAmerica faces an unwanted takeover proposal from a company less than half its size, Los Angeles-based First Interstate Bancorp, and informal overtures from industry leader Citicorp in New York.

Citicorp is thought to be pressing regulators for permission to acquire all or part of BankAmerica, perhaps through its Citicorp Savings unit in California.

At the same time, B of A must contend with the sometimes hostile and always skeptical news media and fierce competition from such opportunistic rivals as Wells Fargo, Security Pacific and a host of savings and loans, credit unions and financial services concerns.

Entrenched Bureaucracy

From within, it faces a restive--many say demoralized--work force and an entrenched bureaucracy that defied five years of genteel cost-cutting efforts by Armacost.

The loyalty of the employees is also suspect. Many blame Clausen for laying the groundwork for problems that surfaced under Armacost, and a group of middle managers even attempted to contact members of the board of directors in an effort to block Clausen's return when word of his impending appointment leaked out last month.

From its long-suffering shareholders, whose dividends on common stock were eliminated earlier this year, BankAmerica's officers and directors face no fewer than 21 lawsuits charging them with mismanaging the company's affairs.

Looming on the horizon may be a proxy fight instigated by First Interstate, whose board of directors is meeting Monday to consider its next step in the takeover drama.

As Clausen marshals BankAmerica's defenses against First Interstate and other would-be suitors, BankAmerica's newly named president, Thomas A. Cooper, is sharpening his cost-cutting ax and dreaming up new ways to win business for the bank.

Within the past month, Cooper has offered cash bonuses to any B of A employee--janitor, teller or executive--who can persuade friends or relatives to open time deposits or trust accounts at the beleaguered institution.

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