Hard Noses, Tough Talk, Mutual Respect

A couple of tough guys. That's the word on First Nationwide Bank chief executive Gerald J. Ford, 51, and his counterpart at Cal Fed Bancorp., Edward G. Harshfield, 59.

So perhaps it's appropriate that when the time came to hash out a merger, they met - in secret at a Los Angeles-area airport service center - and developed grudging admiration for each other.

"I have great respect for Ed and what he has done for Cal Fed and how he represented his shareholders," Mr. Ford said.

"He's a professional - a no-nonsense, direct, ethical, good partner in a negotiation," Mr. Harshfield said of Mr. Ford.

Born in the small Texas Panhandle town of Pampa, Mr. Ford made his fortune in Texas banking at a time when other bankers went bust, to jail, or both.

Getting others to lend him the money in the late 1970s and early 1980s, Mr. Ford bought a string of small Texas banks that he turned into a $3.9 billion-asset bank company called First United Group. He sold the company to Norwest Corp. in 1994 for $495 million, taking home stock worth $60 million.

Mr. Ford's partnership with Ronald O. Perelman started in 1988, when they teamed up to buy First Gibraltar Bank from the federal government, in a deal that netted them so much profit that many thought the feds had been had - $700 million in gains from selling it when five years later, not counting $2.7 billion in tax benefits.

Mr. Ford and Mr. Perelman partnered again in 1994 to buy the money- losing First Nationwide for $715 million from Ford Motor Co. This deal also turned heads, as Ford Motor kept most of the bad loans, and Mr. Ford and Mr. Perelman got what is now a $17.9 billion-asset thrift earning a stellar 24% return on equity.

Mr. Harshfield grew up in a Detroit suburb, and later took up parachuting and scuba diving to his fears of heights and swimming. He spent his early career in the leasing and finance subsidiaries of Ford and Pepsico before taking over Citicorp's leasing division in 1971.

He later parlayed close connections with regulators to become a Mr. Fixit of troubled banks and thrifts, running, at the government's behest, the failing Columbia Savings and Loan of Beverly Hills and First City Texas National Bank.

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