By Ray Birch
BURTON, Mich.–Every credit union has seen and heard the statistic—half of all Americans lack $400 for a financial emergency. For one CU the recently concluded strike by GM workers offered a real-life look at whether that statistic is accurate, as well as the strategies that work best when members hit a prolonged financial challenge.
ELGA Credit Union has been able to help its members have a far more enjoyable holiday season as a result of the steps it took during the United Automobile Workers Strike, the longest auto workers’ walkout in 50 years.
General Motors’ workers were on strike largely for higher pay, no healthcare premium increases and greater investment in GM factories—demands eventually granted by the automaker. The walkout included 48,000 auto workers from some 50 plants in the United States.
Reflecting on the tough times many members faced in September and October, ELGA EVP Terry Katzur told CUToday.info the credit union was proactive in the face of a protracted six-week strike.
Phones Start Ringing
“We started getting calls immediately. As soon as there was talk of a strike, many of our members who work at General Motors reached out to us,” said Katzur, adding members have not only thanked the CU for helping them make their way through the strike days but also for helping them this holiday season. “That was one of the very good things that happened in this strike—our members did not wait until it was too late to let us know there could be a big issue. They felt from the beginning the strike could be a long one.”
And the members were right, with the GM strike lasting about six weeks, many GM workers faced hardship conditions, noted Katzur.
“I know a lot of families live paycheck to paycheck, and what they were getting in strike pay was not much, about $250 a week, maybe $275 near the end,” recalled Katzur. “That’s enough to help put food on the table and maybe make a car payment, but not much more by any stretch of the imagination.”
Helping A Thousand People
But the fact ELGA Credit Union was able to act ahead of the strike really kept many of the about 1,000 members who needed special assistance during the walkout, such as loan payment deferrals and quick cash, from landing in a tough spot financially then and now, Katzur said.
“They did not wait until it was too late and were past due on a payment,” Katzur said. “That gave us the time we needed to work out plans and make special arrangements.”
Striking GM workers were not the only ELGA members affected by the long GM worker holdout, noted Katzur.
“We had many members who work for local suppliers—companies that provide parts to General Motors. Many of those workers got laid off during the strike,” Katzur said. “We were offering support to all of those affected. I think we deferred more than 1,000 payments, anywhere from one to three months.”
Suppliers’ Workers Hit Hard
Katzur said those who were laid off from local suppliers likely felt the effects of the strike the most, as they did not receive strike pay and typically earn less than GM workers.
“So they were in a tougher spot,” Katzur said.
The biggest requests the ELGA Credit Union received were for short-term, small-dollar loans, said Katzur.
“Cash flow was the big issue, and we did a lot of unsecured loans,” he said. “We also did a lot of fee reversals, as, understandably, people overdrew their accounts.”
Katzur said he could not recall the last time General Motors here faced a strike, estimating it was before the financial crisis in 2007. He estimated about 10% of ELGA’s 70,000 members work for General Motors or one of its suppliers.
Katzur added that he believes, based on what he has seen from the CUs’ membership, that the statistic that half of all Americans lack $400 for a financial emergency is true.
Terry Katzur
“I am not sure if what we have here in Flint (Mich.) is representative of what is going on across the country, but I know there is a large number of people who if they miss one paycheck they are in real trouble.”
A Changing Auto Market
With one-in-10 members tied to GM, Katzur said the credit union is aware of the changing face of the automotive industry and how that 10% could someday be affected by the emergence of self-driving cars, subscription services, and just the general trend toward lower levels of car ownership.
“If you listen to GM, they are attempting to change over to more electric vehicles and so forth, and I think that will change the dynamic of how vehicles are built,” said Katzur. “But I don't know what that will mean for individual employees. I know that part of this last strike was trying to get some assurance from GM that some of these factories will remain open for the foreseeable future to keep people working. Now I don’t know where this change will eventually land the credit union, maybe we begin financing a different type of car…It’s hard to speculate.”