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Disbelief and anxiety were written on the faces of staff at American International Group Inc. as they grappled with the idea that their company, which was once the largest insurer in the world and one of the safest places to work, was struggling for its survival.
Workers at the company’s lower Manhattan offices, one block from Wall Street, said there were more lunch deliveries than usual, as staff opted to stay inside rather than brave a phalanx of news reporters and cameras camped outside.
There was a bigger police presence than normal in the Wall Street area and security guards were double-checking ID’s of everyone who came in or out of the AIG building.
Some workers at the 89-year-old institution were shocked that the company could find itself in a crisis like the ones at Lehman Brothers Holdings Inc., which just filed for bankruptcy protection after failing to find a rescuer, or Bear Stearns, acquired earlier this year in a “shotgun” merger.
“I came to this company because it was a big company, and big companies tend to stick around,” said one male AIG employee who declined to give his name.
“There’s a massive culture of uncertainty within the building,” said a woman who has been in the insurance business for 20 years.
“I’ll be the guy to turn out the lights and lock the door,” joked a man who said he had a senior-level position at the company.
“I think the idea is to take a nap at my desk and be woken up when this is all over,” another woman said.
One woman who went through the “Black Friday” stock market crash of 1987 played down the gravity of the current situation. “This is nothing compared to that,” she said.
New York State officials said they had reached an agreement with AIG allowing the insurer access to $20 billion of its own capital. Under the plan, AIG will be able to shift the funds from its insurance subsidiaries to the parent company. That news helped lift employees’ mood somewhat.
New York Insurance Superintendent Eric Dinallo is appealing to the federal government on AIG’s behalf to provide additional access to capital, New York Gov. David Paterson said.
But Paterson stressed it was not a government bailout. “We will not expose the taxpayers of this state to any risk,” he told reporters.
“Like all New Yorkers I am deeply concerned about the financial crisis that has engulfed the markets,” Paterson said, noting that Wall Street brings in 20 percent of the state’s revenue.
“Some companies have served as a bedrock of the system… and one of them is AIG,” he said. The company employs 6,000 people in New York City and another 2,500 elsewhere in the state. AIG has 116,000 employees worldwide.
“AIG contributes to New York’s position as a world financial leader,” the governor added.
AIG’s problems come after Lehman Bros filed for bankruptcy protection and Merrill Lynch & Co Inc. agreed to sell itself to Bank of America Corp, months after Bear Stearns’ near collapse and acquisition by JP Morgan Chase & Co. with financial backstopping from the U.S. government.
AIG, an insurance and financial services company, is also known to millions as the shirt sponsor of current European and English champions Manchester United, one of the world’s leading soccer clubs.
According to the 2008 Forbes Global 2000 list, AIG was the 18th-largest company in the world.
The company was founded by Cornelius Vander Starr, who traveled to Shanghai with just 300 yen in his pocket in 1919 after serving in World War One. AIG now has operations in approximately 130 countries and holds assets of over $1 trillion.
(Writing by Steve James; Editing by Gary Hill)