Goldman Sachs (GS) President and COO Gary Cohn spoke with Bloomberg Television’s Stephanie Ruhle and Erik Schatzker about the impact of Hurricane Sandy on the bank from Cleveland, OH this morning. Cohn said that the company will asses the risk of having two buildings in close proximity after the hurricane caused “a little bit of flooding” at offices in Manhattan and in Jersey City.
Cohn said that “it’s one of the things we’ll talk about…They’re very much in similar weather zones, so clearly something to be thought of.” He also “agrees with the decision” to close trading. Excerpts from the interview can be found below, courtesy of Bloomberg Television.
Cohn on damage from the hurricane:
“We have two major buildings that were in the eye of the storm. We have 30 Hudson directly across the river from 200 West Street, so we were protecting two different buildings on two different shorelines. Our buildings came through with very little damage. A little bit of flooding here and there, but outside of that, our buildings are in very good shape and are ready to go.”
On whether he has doubt that the company’s office buildings are too close together and that they should move further inland (Poughkeepsie or Rutherford, for example):
“It is one of the things we will talk about. We like our location right now because we like the ability to move people rather seamlessly between the New York and the New Jersey location. We think that provides an enormous amount of synergy. We have gone through all of the protective measures we could to isolate the buildings from each other as far as the electric grid, phone grids, things like that, so they do stand relatively independent from each other. But you are correct, in terms of weather, they are in similar weather zones. Clearly, something to be thought of. But we do have a multi-city backup plan facilility. And we have a very large building and operations in Salt Lake City. I was out of there last week. We have over 1600 people there that can carry out many, if not all, of the operations of Goldman Sachs as well.”
On the steps Goldman has taken to make sure that service to clients is uninterrupted:
“What we have done is what most of our natural competitors would have done. We have all got various locational backup strategies and we are relatively seamlessly to move our business centers around the world, whether to our main offices in London, or in Hong Kong, or in Tokyo, or our other facilities in and around the tri state area. We have a facility in Connecticut, one in Princeton, New Jersey. We also have a large facility in Salt Lake City. We have the other offices around the U.S., like in San Francisco and Chicago where we can also conduct a lot of business from.”
On what Goldman will do this week to get employees back to the office:
“We’re working through all of the contingency plans. For us and everyone in New York City, the New York Stock Exchange as well, will be how to get people back into those buildings to becoming operational by having the critical staff there. In some respects, we are relatively lucky. In New York, a lot of our people live in Lower Manhattan and I would consider them to be within walking distance to our building. We also have a large portion of employees in Battery City. We’re confident we can get a lot of people to work. We’re working on contingency plans right now on how to move people logistically are around the city. We have groups in New York right now talking about that and there’s a bunch of conference calls trying to figure out how to get people where they need to be.”
On what job functions are the most critical:
“Tomorrow is month-end and we are heading to the unemployment on Friday and then in the election is next week. To be able to service our clients most effectively is really what it is all about. The clients that really need people in the building are more of the trading clients. The securities division personnel, the sales and trading personnel are those that will be our number one priority to get into the building. And once you bring in the sales and trading people, then you need to bring in your back office, your support, technology support, and payments and settlements. Although, that business has been working seamlessly out of Salt Lake City and we can run all of our payments and settlements from there.”
On whether closing the markets was the right decision:
“This is a judgment call. It is an opinion, and my opinion is the safety of the people of New York. And it is not just the people of Goldman Sachs that you have to worry about. It is all the other support services and taxi drivers and restaurant operators and all those other people that would have wanted to work to facilitate the commerce of the city. I think it was the right decision to get everyone out of harm’s way. Had they not done it, we would have been spending all day talking about what were people thinking about not thinking about the personal safety of all of the people in New York. I have to ultimately agree with the decision.”
On whether Goldman Sachs will play a role in the recovery of Battery Park:
“We completely feel an obligation to the neighborhood. One of the groups that we have working with right now is a task force trying to figure out what we can be and should be and can be doing for the neighborhood. We are talking about opening up the Conrad hotel to people in the neighborhood. We do have backup generation facilities at the Conrad hotel so there is electrical power there. There are other things there that we have been talking about how to use that facility for food, water, electricity for those who are in need in the neighborhood. We clearly feel an obligation and a responsibility to the neighborhood and the people that live there.”
On NYU hospital needing to be evacuated (Cohn is a member of the hospital’s board):
“I am very concerned. A hospital the size and importance of NYU is a mainstay of New York City in the tri-state area for medical care. When you are going through a natural disaster, obviously medical care is a crucial component. I have concern from that standpoint. The reality is that NYU is also in Zone A in a low-lying flood area on the East River. I am acutely aware that the infrastructure at NYU is somewhat old. We do have backup generation facilities. They are not state of the art and not in the most state of the art location. That is all very well known by the board of directors at NYU, and in fact, we are undergoing a $3 billion renovation of the entire hospital facility to completely modernize it to ensure that we would have backup power forever with state-of-the-art technology. We are in a very large philanthropic campaign to try to raise about $3 billion to renovate the hospital. We have been quite successful so far…”
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