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How it affects the region: Economic impact not as big as psychological

Wednesday, July 18, 2001

By Joyce Gannon, Post-Gazette Staff Writer

For a region that hasn't done all that well at attracting immigrants in recent years, Pittsburgh is sure getting a lot of overseas attention.

The purchase of Mellon Financial's retail banking operations by its U.S. subsidiary makes The Royal Bank of Scotland the latest in a growing list of European companies that have scooped up Pittsburgh-based businesses in recent years.

Others include Westinghouse Electric Co. (British Nuclear Fuels PLC); Fore Systems (now part of British-based Marconi PLC); General Nutrition Cos. (Royal Numico N.V. of The Netherlands); J&L Specialty Steel (French steelmaker Usinor); and, just two months ago, Beaver County's Tuscarora Inc. (Sweden's Svenska Cellulosa Aktiebolaget).

Like those, Mellon's decision to sell is likely to deal more of a psychological than economic blow to the region. That's because Royal Bank's Citizens Financial subsidiary is retaining all of Mellon's employees and keeping branches open but replacing Mellon's name with its own.

"I'm not a marketing or advertising guy, but [the name change] may prove to be unwise," said Robert Strauss, a Carnegie Mellon University economics and public policy professor.

The bank's name also adorns several Downtown office buildings as well as the Mellon Arena. But the names on those signature buildings will stay because the sale to Citizens includes only the bank's retail operations; the headquarters for the rest of Mellon's financial services business, will remain here.

Citizens' biggest challenge in the market will be to encourage employees to convey positive impressions to customers, said Erika B. Seamon, a branding expert with Kuczmarski & Associates, Chicago. "It will be imperative that they know what kind of company they're working for and what message they must relay to customers as opposed to the old days with Mellon."

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