The idea of breaking Citigroup (C) into pieces is hardly new. From the day Sandy Weill threw the place together, many analysts could see no benefit to an umbrella company holding everything from a brokerage firm to commodities trading operations.

The stock market has proved the critics right. The creation of Citi has had little benefit.

The financial company’s most recent earnings lifted the spirits of some shareholders. The losses at Citi were less in the second quarter than they were in the first. There are skeptics who believe that the tick up was only a brief rest on the way to future, larger losses.

One of America’s biggest unions, which owns a modest piece of Citigroup, has decided to push on the firm’s board to dismember the place. The American Federation of State, County and Municipal Employees thinks it can put on pressure in the name of creating parts that are worth more than the whole.

According to the FT, In a letter sent on Friday to Sir Win Bischoff, Citi chairman, Gerald McEntee, Afscme’s president, urged Citi’s board to “restore shareholder value that is currently trapped in the sprawling financial supermarket approach”.

The missive is almost certainly a waste of time. For reasons known only to itself, the Citi board has failed to do the one thing which would almost surely take the company out of harm’s way. It has refused to sell off any of the firm’s really big and valuable divisions which include its asset management operations and Smith Barney.

While Citi’s board and senior management have stressed the need for cutting costs and simplifying the huge and unwieldy operation, little of the sort has happened.

Citi has no intention of tearing itself apart, no matter how much sense it makes.

Douglas A. McIntyre

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