Executives of the second-largest mortgage company sitting on a bus for four hours? It would have been unthinkable during last year's home lending boom. But this year's bust has officials at Norwest Mortgage contemplating just that.
To help cut expenses, the Wells Fargo & Co. unit is curtailing air travel between Des Moines, where it is headquartered, and Minneapolis, where it has six offices.
Executives now have to get approval from senior management before booking flights to Minneapolis, and they have been encouraged to arrange videoconferences - or, if they must be there in person and are going in large groups, charter a bus.
"The idea is to limit as much travel as possible," said Norwest spokesman Anita Liskey. "We have a lot of employees at both locations, and it's expensive to fly them back and forth."
In fact Mark C. Oman, chairman of the company, recently rode in the passenger seat of an employee's car from Minneapolis to Des Moines, a three-and-a-half-hour trip.
Norwest, like its contemporaries, is feeling the bite of rising interest rates. Its loan production in the third quarter was $19 billion, off 31% from the same period a year earlier, and though profits rose, the company is adjusting to a contracting market.
Air travel is particularly expensive for Norwest. Because Des Moines' airport is so small, airlines charge a premium for flying in and out of the city. And Norwest is dependent on Northwest Airlines, which dominates the Minneapolis airport.
The mandate to put a lid on travel costs came from Norwest's second-in-command, managing director of sales and operations Peter J. Wissinger, who declined to be interviewed for this article.
Ms. Liskey said the crackdown on unnecessary travel is "one of many things we're doing" to curb expenses. "We're looking at a lot of ways to increase efficiencies."
The company recently agreed to buy the Minneapolis corporate campus of manufacturer Honeywell Inc., and plans to consolidate its six offices into that site. Like most mortgage companies this year, it has laid off workers - 300 this year, mostly in production and back-office functions. The company has 15,000 employees.
