Steel Plant's CU Now Operating Out Of Manager's Home

Register now

The $2.8-million LTV Steel Salaried FCU may have been forced out of its bankrupt sponsor's building, but the credit union is now operating from the home of its lone employee.

"Liquidities are under control so they're not too concerned," said Dave Shoup, research and information director for the Ohio Credit Union League. "These lay offs have been expected for a long time."

The credit union, which had been operating out of the steel plant where its treasurer and only paid employee, Tom Baldassari, worked, was reportedly forced out of the building along with several accountants who were laid off in November. LTVSSFCU is down from $3.3-million in assets a year ago.

Plant Seeking To Void Contract

The mill officially shut down in December after a federal bankruptcy judge in Youngstown approved its request for Chapter 11 protection. Now LTV is seeking to void its union contract requiring the company to underwrite health care and unemployment benefits for up to 100,000 workers and their families.

In the meantime, the agreement allows reduced unemployment benefits through Feb. 28 for about 7,500 employees and continues health care for 45,000 retirees for eight to 12 months. The deal also let some union workers retire.

LTV said it is attempting to woo a new steelmaker into the plant. Shoup, who made an onsite visit to Baldassari's home after many unsuccessful attempts by The Credit Union Journal and league officials to reach him by phone, said the treasurer has things under control and expressed his commitment "to seeing this through."

In preparation for layoffs at the LTV factory (now in bankruptcy proceedings), the credit union reduced its loan portfolio from "one million dollars last year to $350,000 this year," Shoup said. As would be expected, there have already been some repossessions of property stemming from delinquencies. The hope now is that those laid off will have success in finding new jobs.

In the meantime, Shoup said, the CU plans to work within the members' new limited budgets.

Prior to the judge's ruling on the bankruptcy, Shoup observed, "There isn't a credit union that can continue without having some kind of sponsor."

Options, of course, include merging or expanding its membership base. LTVSSFCU is one of three CUs that serve steel workers and executives at the company. The $2-million USA Local 188 CU is in good shape financially due to low overhead. But, said its treasurer and only paid employee, Paul Scuba, a run by LTV workers to withdraw their money could hurt.

USA Local 188 did recently change its bylaws to serve the community, but doesn't have time right now to pursue the expanded potential membership.

One Credit Union Planned Ahead

A third CU, the $25-million Steel Valley CU, was originally the major credit union for steel workers, said General Manager David Lawhun. But, in recent years when it became apparent that the factory was not doing well, the credit union began diversifying its membership. Of 11,000 members, 9,500 work for other industries.

The steel factory reportedly has been losing $2-million a day since it filed for Chapter 11 protection last December.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER