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THRIFT BATTLE: RAISING THE STAKES

American Savings Workers--Adept at Adapting--Face Still More Change

March 07, 1997|JAMES S. GRANELLI | TIMES STAFF WRITER

IRVINE — Longtime employees at American Savings Bank are used to dramatic changes. After all, they've had four operators in 15 years.

But the 3,500 workers in the statewide system could face some major adjustments if American's latest owner is successful in acquiring a major competitor, Great Western Financial Corp., and merging the two thrifts.

Washington Mutual Inc., the Seattle-based company that bought Irvine-based American in December, said Thursday that it has agreed to buy Great Western in a stock swap. Rival suitor H.F. Ahmanson & Co. is expected to press its own offer, setting up a takeover fight for Chatsworth-based Great Western.

For American, an acquisition by Washington Mutual will mean more layoffs and the end of its well-known, and once-troubled, name. American would be converted to the Great Western brand.

"We feel bad about the fact that the American Savings name will go away," said Mary Cox, an American branch manager in Lakewood. "But it's like a woman who gets married and decides to change her name. There's a new beginning, and it's going to be happy."

Indeed, Thursday's news barely seemed to bother American's employees, according to managers. The employees were flush with excitement from recent meetings about new products and better benefits under Washington Mutual.

"They're ecstatic," said Stephen DiPadua, a Beverly Hills branch manager. "They're now seeing a 401(k) plan, a stock purchase plan, a benefits plan. We had good benefits at American, but Washington Mutual's is far superior."

Said Cox: "There are a lot of questions we have that I'm sure will be answered soon. But we feel that with the merger we have gone through with Washington Mutual, we have confidence they will treat us fairly."

Even so, a Great Western branch is only a block away from Cox's American branch, and it's likely that one of them will be consolidated into the other if Washington Mutual wins the acquisition battle.

Even without the Great Western deal, Washington Mutual is planning to lay off at least 200 American employees--121 at the Irvine headquarters and 79 at the huge Stockton consumer service and administrative office.

Most of them will go in the third quarter after customer accounts and other files are converted to Washington Mutual's computer system.

An additional 17 may be laid off later.

Branch employees escaped the cuts, mainly because American was Washington Mutual's entry into the hot California market. But they won't escape cuts if the Great Western acquisition goes through.

If it acquires Great Western, Washington Mutual will close about 100 of the combined network of 829 branches and about 100 of the combined 316 loan offices systemwide, American spokeswoman Dianne L. Seeber said. All of American's 158 branches are in California, while Great Western and Washington Mutual have branches in other states as well.

Kerry Killinger, Washington Mutual's chairman, said that the ax will fall evenly among Washington Mutual, American Savings and Great Western workers.

American was created in late 1988 from the ashes of the failed American Savings & Loan, once the nation's biggest thrift. The old thrift, first cobbled together in mergers engineered by famed entrepreneur Mark Taper in 1955, was spurred to greater growth in the freewheeling 1980s by Charles W. Knapp.

But billions of dollars worth of troubled loans and securities put the thrift essentially under the thumb of federal regulators for four years until parts of it were sold to an investor group led by Fort Worth financier Robert M. Bass.

Bass sold the institution in December to Washington Mutual in a stock swap that made him Washington Mutual's biggest single shareholder.

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