Decade-Old Decision Pays Off As Plant Is Closed
EVANSVILLE, Ind.-When the local Whirlpool plant closed its doors at the end of June, one CU found itself thankful for another tough decision the appliance manufacturer handed down more than 10 years ago.
In 1999, Whirlpool demanded that all credit unions serving its plants remove "Whirlpool" from their names. The company's CU in Evansville-now called Diamond Valley FCU-took the opportunity to become community chartered, and today less than 6% of its membership are affected by Whirlpool's layoff of a 1,100 local workers during the past decade.
"It has been a good move for us, especially at this point in time," said CEO Brian Lankford. "We have more than eight years of serving a diversified membership under our belt."
The recent plant closing, which cut about 550 jobs, was preceded by a layoff of 450 workers in March. Lankford said the $133-million credit union has yet to experience any negative affects, and that members are coping. Whirlpool employees are receiving their regular salary, part of that through unemployment, for six months. "That means those laid off in March are still making the same amount through September and those laid off in June are good through December," Lankford said.
DVFCU's .93% delinquency ratio from March has not changed, and net charge-offs stand at .41%. When the plant closing was officially announced in August 2009, Diamond Valley began taking steps. It beefed up its provision for loan loss account, including a special provision for Whirlpool employees. But only one member from this group has defaulted, Lankford shared. "We will leave this provision in place for an extended period of time."
Lankford is fairly confident that the credit union and former Whirlpool employees will not be affected too negatively by the plant closing, since the majority of workers at the plant before closing held 15 years of seniority. "Quite a large number are at retirement age. I think they will go from their regular paycheck and draw Social Security and their pension, and probably continue to pay their loans."
DVFCU's analysis showed large percentage of loans held by plant workers would be paid of by the time the plant closed.
Feeling that loans may be a manageable issue for Whirlpool members, DVFCU is concentrating on helping the company's former employees with retirement planning and services. "They are getting some other money from Whirlpool, maybe about $10,000 each, and that money is eligible to go into an IRA. And some of the younger people who may not put that money into a retirement plan may use the cash to pay down or pay off a loan."
Slamming The Door
Lankford is confident in the resiliency of former Whirlpool workers to manage through the change, abut also acknowledges the dramatic life change on many residents.
"As far back as 1981, when I started at the credit union, I had heard rumors Whirlpool would leave Evansville. But there were a large number of people who felt it would not happen. When it all came down last August, it was like someone slammed the door in your face. You had heard about it for so long, but when it was actually announced, people were very shocked. It's a big change for so many."