NatWest delay claims first casualty

19 April 2000
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20 April 2000 | Geraint John

Morale among purchasing staff at NatWest has hit rock bottom following last month's takeover by Royal Bank of Scotland (RBS). One senior manager has already quit and others are actively looking for new jobs.

Staff are unhappy at what they see as the function's demotion and at continuing uncertainty surrounding its role - a situation compounded by the failure to name a new purchasing head.

"People understand that you have to take stock in the wake of a merger, but this has gone on for too long," said Simon Nelson, a senior purchasing manager responsible for Coutts, the exclusive bank owned by NatWest that includes the queen among its clients.

Nelson has resigned after six years at NatWest and will take up a new post at investment bank Morgan Stanley Dean Witter next month. He told SM his decision to leave was borne out of frustration at the "introspection and stagnation" caused by the takeover battle.

"A number of major strategic projects we've been working on are effectively on hold," he said. "Opportunities for big savings are being lost."

Nelson added that the distancing of purchasing from the board was a bad sign. Before the takeover, Peter Smith, NatWest's group purchasing director, reported directly to main board member and operations chief Bernard Horn, who has since left the company.

But under RBS's new organisational structure, purchasing will be at least two, and possibly three, steps removed from the boardroom.

According to its plan, the head of purchasing, once appointed, will report to a director of central services, who is also yet to be named and whose responsibilities will include mail and security. They in turn will report to another non-board director, Mark Fisher, chief executive of manufacturing - RBS's curiously titled division charged with streamlining back-office functions and saving a large slice of the promised £1.2 billion annual total.

But, as SM went to press, there was speculation that RBS might opt instead for an Edinburgh-based purchasing director reporting directly to Fisher.

Smith would not comment on this, the possibility of more departures from his 70-strong team or purchasing's apparent loss of status. But he did say that he hoped "uncertainty about key appointments will be resolved quickly".

Fisher told SM he could understand why purchasing staff were frustrated, but said there was a lot of work to do and it was important to get things right. "Purchasing is a cornerstone of what we're doing, but it's only one part," he said, adding that RBS's plans for the function, including the top job, would be announced shortly.

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