With Plant Teetering, Cleveland CU Seeks Merger

Register now

Triggered by the demise of its sole sponsor, LTV Steel Salaried FCU is planning to merge with another CU.

The $2.4-million CU serves about 700 salaried employees of the LTV Steel Plant here that officially shut down in December after a federal bankruptcy judge approved its request for Chapter 11 protection.

While LTVSSFCU Treasurer Tom Baldassari, retired from the plant, is still operating the CU from his plant office, he said members have been invited via a notice included in their statements to contact him at home as well. Earlier reports that said Baldassari had been forced out of the building were not true, he said. And, despite unsuccessful attempts in recent weeks by both The CU Journal and Ohio Credit Union League officials to contact Baldassari at the plant, he said he is still receiving calls from members there.

Baldassari said several accountants and about 70 hourly employees are still on-site as well-the former closing out books, the latter keeping the plant on "hot idle" while company officials search for a buyer.

During a conference call with The Credit Union Journal and Becky Hart of the Ohio Credit Union League, Baldassari said while it was apparent the plant was in jeopardy, "nobody really ever thought the company was going under."

The worst they expected, he said, was a partial closure. In the last year alone, he said, the credit union's assets shrank by about $600,000, in part due to disgruntled employees who associated the LTV CU with the LTV company and withdrew their entire savings.

Staying Liquid

In response to the pending financial troubles at the steel plant, the CU shortened up investments and stopped offering unsecured loans to "keep liquid instead of tying up money."

"Up to eight to 10 months ago, we offered loans up to $2,200 without collateral," he said, explaining that the board decided then that all loans be secured. "The majority we have now are secured by automobiles."

While there is some concern about delinquencies, Baldassari said he suspects a lot of his members-former salaried employees at LTV-already have new jobs elsewhere or have a working spouse to help cushion the blow.

"There is a little liability, but it's not as great as you would think," he said, adding that none of his members have asked about deferring their loan payments.

Baldassari said he's hoping the credit union will be merged by the end of the first quarter.

"We've been a savings and loan credit union for 55 years," he said. "Merging would be better for the members. They are starting to ask about house loans and ATM machines and all that good stuff, and we're just a basic share credit union."

And, if the merger doesn't work, he said, "We are still a good credit union. If we have to, we'll try to go on our own."

Hart said the league stood ready to assist the CU in anyway possible.

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