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Florida candidates for governor talk up job creation but both have experience with job elimination

TALLAHASSEE — Florida's leading candidates for governor boast of savvy business experience and the ability to create jobs, but left unspoken is the fact that both left trails of pink slips behind as they blazed through the cutthroat world of corporate megamergers.

Democrat Alex Sink and Republican Rick Scott each worked for a company that eliminated an estimated 6,000 Florida jobs over their careers, according to a St. Petersburg Times/Miami Herald analysis of a decade worth of news reports, company records and hospital data from the 1990s. Scott accounted for at least 2,000 more job reductions in hospitals outside Florida, according to news reports.

Still, the strikingly similar job-loss numbers underscore how much the two have in common, even as they play up their differences in the campaign to lead a state where 1 million people can't find work and 1 in every 155 houses is in foreclosure.

Both candidates, for instance, say that many of the job cuts they oversaw were offset by new jobs created by their businesses. Both were active in mergers and acquisitions — Sink as president of NationsBank Florida, Scott as chief of the mammoth Columbia/HCA hospital chain. Both are intensely private and publicly awkward, yet have an icy edge and steel spine in the corporate boardroom. Both were forced out or resigned amid tumult. And both are millionaires. But they're not mirrors of each other.

"This is a tough business, and some people don't want to make the tough decisions because it means at times laying off people; it means closing hospitals," Scott told the Dallas Morning News in 1993. "But we are not going to be able to cut medical costs unless we are willing to do that."

In contrast, Sink never made comments as stark and bold as that. She says of the job losses that resulted from her company's mergers, "We knew our goal was to save people's jobs."

Also, the job cuts Sink presided over were ordered by corporate higher ups. But at HCA, Scott was the higher up who charted the course for the layoffs.

Another distinction: On the campaign trail, Sink refrains from talk of cutting state-worker jobs. Scott has made cuts of 5 percent — about 6,300 positions — central to his campaign.

As president of Florida operations for NationsBank as it gobbled up state banking giant Barnett Bank, Sink presided over the postmerger bank, which was expected to eliminate 6,000 posts to streamline operations, closing 200 branches in Florida.

To mitigate the impact, Sink recalls imposing hiring freezes, asking people to do double duty until the merger was complete and offering people transfers.

"We were a team," she said. "Our whole goal was when the day came to close one of those branches everybody was going to have a job."

Sink's recollection is consistent with news accounts. Though there is no account of how many people were left jobless, within a year NationsBank announced about 4,500 people had left the company through attrition and 2,400 new people had been hired, according to published reports.

That hasn't stopped the Republican Party of Florida and the Republican Governors Association from running ads bashing Sink as a job killer for her role in the merger and falsely claiming she got a bonus for doing it.

When Sink left the company, she had earned $8.8 million in the last three years, a combination of her salary and cashing in 26 years of accumulated stock options, pension and deferred compensation, but it was not a bonus or tied to the job losses.

"It's a fair attack," Scott said. "If you lay a number of people off and take a big bonus at the same time, I think that's fair. People need to know that — especially at a time when we have all that unemployment in the state."

Scott, though, benefitted financially from the Columbia/HCA job cuts because it helped boost the company's stock, which was a darling on Wall Street until the federal government launched a FBI probe that led to Scott's ouster and a record $1.7 billion Medicare fraud fine. That happened in 1997, the same year as the bank merger under Sink.

Like Sink, Scott doesn't mention layoffs. He talks of "efficiencies'' he brought to a bloated health care industry that led his company to shutter more than 50 hospitals and eliminate 6,215 Florida jobs, according to state regulators. Hundreds more Florida jobs were lost when Columbia/HCA had to close its home health care agencies in the wake of the investigation. That's in addition to the thousands of jobs eliminated under the hospital chain in other states.

Scott wasn't just closing hospitals to make money. Throughout the 1990s, hundreds of hospitals closed across the nation as the health industry changed. The bank industry was also undergoing transformations of its own. In both cases, the job cuts were the product of a merger-and-acquisition binge of the go-go 1990s — a time when bigger was better and economies of scale ruled.

"The idea was that when two companies merged, because of the overlapping markets, they could save money by closing operations — which probably means some people lost jobs," said Stan Smith, professor of finance at the University of Central Florida.

While Scott said he has no idea how many jobs he created, he believes the number is in the many thousands. Sink says she, too, created jobs by steering $1.7 billion in loans to Florida's small businesses. She also reports that, during her tenure, bank deposits tripled and the banks' net income grew 86 percent.

For the people who got pink slips, however, the memories of unemployment still sting.

Barbara Emanuel of New Port Richey was among about three dozen Community Home Health Care employees let go in 1996 about a year after Columbia/HCA bought it.

"I was a single mother with two children. I lost my house," Emanuel, 56, said. Unable to find work near home, she traveled through North Florida and then Texas for years in search of work, leaving her son and daughter with her mother. Eventually, she came back to work as a home health care nurse.

Emanuel, a Republican, "can't believe'' Scott is the GOP choice for governor. "I get so upset when I see him on TV," she said. But, she said, she doesn't know anything about Sink.

David Ginzl of Jacksonville does. He had two hours' notice before he lost his Barnett Bank job after NationsBank took over. Ginzl doesn't fault Sink, but he doesn't describe NationsBank in the warmest of terms, either.

"No one has ever described the management of NationsBank as compassionate," he said.

Now a history professor who has written books about the history of Barnett Banks, Ginzl said, "For the great majority, NationsBank offered them opportunities for jobs within NationsBank."

A more lasting legacy than the job cuts, however, was the troubles NationsBank had merging the two bank cultures. Less than a year into the Barnett merger, NationsBank acquired Bank of America and assumed its name. The newly consolidated bank lost nearly 1 million Florida customers and satisfaction ratings were at a record low.

Bank of America put a new focus on customer service, shuffled its senior officers and replaced Sink. By 2000, the bank's stock price had risen about 40 percent.

Scott's departure from the company he built was much more sensational because of his high position and the fallout from the criminal probe. He was never criminally charged, but Sink's campaign has taken to calling Scott a fraud. Scott's campaign portrays Sink as inept.

Florida candidates for governor talk up job creation but both have experience with job elimination 10/01/10 [Last modified: Friday, October 1, 2010 11:29pm]
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