Opinion

THE CEO HOSTAGE CRISIS AT BOFA

BANK of America CEO Ken Lewis may have to sacrifice his company to save his job.

Lewis is under fire from angry shareholders looking for change at the troubled bank. But his biggest worry may be the powerful Service Employers International Union.

The SEIU, a national union with locals in a vast range of private and public workplaces, has been trying for more than a year to organize BofA’s tellers and office workers — tens of thousands of jobs. But there’s no sign it will pull that off without cooperation from management.

Perhaps not coincidentally, the SEIU in recent weeks ramped up its criticism of BofA, demanding Lewis’ scalp in mass rallies outside the bank’s headquarters and calling on Treasury Secretary Tim Geithner to force him out.

BofA officials tell me that the SEIU agitation took off after Lewis refused a sit-down with the union’s leaders.

And the union’s public gripes about Lewis seem pretty thin. SEIU officials told me that the protests are about the fact that tellers and other lower-level employees were being forced to sell banking products to consumers that contributed to the collapse of the financial system last fall — and that stopping such sales practices requires Lewis’ removal.

“We think Ken Lewis is bad for the company and the economy, and we also think that as long as you have a system where workers can’t speak out, you can’t fix the economy,” said Stephen Lerner, an SEIU assistant president.

Somehow, it’s a little difficult to believe that the SEIU’s main goal is the recovery of the financial system.

And I have some trouble seeing how being a bank teller is akin to working at a sweat shop. My dad was a union wire lather (a form of iron worker), a job where men risked their lives on the job nearly every day. He nearly lost his leg in one accident, and suffered a near life-threatening concussion in another.

A BofA spokesman says, “We think Bank of America is a model employer, and we don’t see any advantage of associates being represented by a third party.”

Yet Lewis certainly has to worry about the union’s threats. BofA still owes tens of billions to the federal government, bailout funds that covered losses like those arising from its ill-timed purchase of Wall Street basketcase Merrill Lynch.

The feds, that is, have de-facto control of the bank (as they do of Citigroup and much of the rest of the industry). And that control is being exercised by the Obama administration — the most union-friendly in decades.

The SEIU alone spent $60 million to elect this president. But so far the union doesn’t have much to show for a return on that investment. Sure, Anna Burger, formerly No. 2 at the SEIU, sits on the president’s Economic Recovery Advisory Board — but patronage jobs aren’t what the union wants.

Growing membership is. Why not use this crisis — with banks dependent on the government, and Big Labor’s friends in charge in Washington — to enlarge the rolls?

“These guys want to organize, plain and simple,” one senior Bank of America official told me. “And they want to use us as a launching pad to expand their reach to other banks that accepted bailout money.”

How long will Lewis hold out? That’s anyone’s guess. No one really thinks that Treasury’s Geithner or the rest of Obama’s core economic team would be eager to do the unions’ bidding.

But that could all change with a simple call from the guy at the top who owes the SEIU so much.

Already, the administration has squeezed concessions from BofA, ousting board members friendly to Lewis and forcing Lewis to relinquish his role as chairman.

And his hold on the CEO jobs appears more precarious by the day. The big question inside Bank of America is: Will Lewis be willing to give into the SEIU to save his job?

CNBC on-air editor Charles Gasparino is working on a book about the Wall Street meltdown.