NEW YORK - He didn't exactly point fingers, but James Dimon, the new chief executive officer of Bank One Corp., depicted it last week as a company that had run amok.

Mr. Dimon joined the beleaguered Chicago banking company in March and immediately began a review of operations. In highlighting some of his findings for investors last Wednesday he managed to work in plenty of barbs about how the company had been mismanaged before his arrival.

John B. McCoy, Mr. Dimon's predecessor, left Bank One in late December under intense pressure from Wall Street and his own employees. He had borne the brunt of the criticism for the company's woes, which began last year with a string of profit warnings related to its troubled First USA credit card unit.

Mr. Dimon suggested Wednesday that the previous regime did not monitor big expenditures adequately.

"I had been on the job six weeks and hadn't been asked to sign anything," he said. At cost-conscious Citigroup Inc., where he was president before his departure in 1998, expense items were constantly crossing his desk for approval, he said.

But the situation at Bank One is changing fast, he said.

At times during the presentation, at which he announced a $2.8 billion second-quarter restructuring charge and a plan to cut expenses and improve customer service, Mr. Dimon painted a picture of a corporate culture that oozed inefficiency, had little accountability, and was indifferent to waste.

Mr. Dimon said that in his strategic review he discovered that:

  • The company was spending $500 million in consulting fees. "Half the time when we ask a question we have to call an outside person to get the answer," Mr. Dimon said, bristling at the idea of having to rely on outsiders for information that could have come from within the company. "You can expect that to go down," he said.
  • Bank One has $5 million of vacant office space that has not been actively marketed.
  • Employees have 22,000 pagers and 12,000 mobile phones. Bank One's annual phone bill was $500 million.
  • The company was spending $20 million a year on employee relocations.

"I can go on and on," Mr. Dimon said. "There's a lot of expense that we were not focusing on in this company. Our vendors are having a feast."A tangled web of seven deposit systems has also bred inefficiency and hurt customer service, he said. The failure to combine the systems has made it "impossible to build a great company," he added. They will be combined sometime in mid- 2001, he said.
Bank One Corp. will also go from 20 domestic bank charters to three, saving $25 million to $30 million a year, he said.

And the company's Internet efforts will go on a diet, Mr. Dimon said. Currently BankOne.com and WingspanBank.com operate on separate platforms. Bank One will bring Wingspan into the bank's retail operations and create one operating platform for the two sites, saving an estimated $30 million a year.

Mr. Dimon said that he believes management has uncovered most of the areas where it needs to sharpen its spending focus, but that the work is not over.

"We have to run lean and fast," he said.

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