National City to Cut 4,000 Jobs; Will Louisville Be Affected?

(National City logo from Wikipedia)

Reuters is reporting this morning that National City Bank, based in Cleveland, Ohio, will eliminate up to 4,000 jobs in response to worsening conditions due to bad loans and bad business decisions:

National City Corp, a U.S. Midwest regional bank hard hit by the credit crisis, on Tuesday announced plans to slash 4,000 jobs and said rising reserves for soured mortgage and real estate construction loans led to its fifth straight quarterly loss.

The job cuts amount to 14 percent of the bank’s workforce and are expected to take place over three years. They are part of an efficiency program designed to save $500 million to $600 million annually by 2011.

Shares of National City fell 17 cents to $2.75 in premarket trading.

Investors have pummeled the bank’s shares, which fell as low as $1.25 on September 29, amid concern that mounting loan losses might cause National City to run short of capital, and perhaps even fail. Core deposits fell $5.5 billion in the three months ended September 30 to $85.6 billion, in part because depositors withdrew balances in excess of FDIC insurance limits.

The million-dollar question for Louisville — and Kentucky at large — is how many of those job cuts will happen here? We’ll keep an eye open for more details.

UPDATE, 11:10 AM: And in case you missed it yesterday (as we did), Business First reported that unemployment in Jefferson County reached 7.1 percent in September:

Kentucky’s seasonally adjusted preliminary unemployment rate for September was 7.1 percent compared with 5.4 percent a year earlier.

The national rate for September was 6.1 percent.

“Nearly every sector of Kentucky’s economy experienced job losses in September 2008, showcasing widespread economic weakness,” Justine Detzel, chief labor market analyst for the Kentucky Office of Employment and Training, said in a news release. “Employment declines reflect government cutbacks in the face of austere budgets, a prolonged manufacturing slump reverberating throughout the economy and retailers and accommodations and food services enterprises suffering as financially strained consumers clamp down on discretionary spending.”

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One Response to “National City to Cut 4,000 Jobs; Will Louisville Be Affected?”

  1. […] you no doubt recall, National City announced earlier in the week that it was slashing 4,000 jobs in response to heavy losses this quart…. No word yet on whether this merger will mean additional job cuts, or if any of those cuts will […]

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