DEARBORN, Mich. - Gov. Jennifer Granholm joined credit union officials last week to unveil a $40-million loan program to retrain the state's besieged auto workers, hit hard by the unprecedented loss of jobs in auto and parts manufacturing.
At a press conference hosted by DFCU Financial, which is spearheading the program in partnership with the Michigan Credit Union League and the state Department of Labor and Economic Growth, the $1.8-billion DFCU said another 34 credit unions across the state have agreed to pitch in one-half of 1% of their assets to the new Career Transition Program that will provide below market, unsecured loans for counseling, training, textbooks and placement services for eligible members.
"When DFCU Financial learned about these sweeping cuts and realized that many of our members may be adversely affected, we just had to do something," Shobe said, noting that his CU has committed $10 million to the program. "Our history began at Ford and our success is linked to Ford so this is our way of trying to help these and other workers who are struggling at this time."
In addition to Gov. Granholm, other dignitaries on hand for the announcement included David Adams, president of the Michigan Credit Union League; Linda A. Watters, commissioner of the Michigan Office of Financial & Insurance Services; Robert W. Swanson, director of the Michigan Department of Labor and Economic Growth, and representatives of many of the participating credit unions in kicking off the program.
Granholm, who is campaigning for re-election in November, told the audience she joined the effort to make sure workers impacted by the state's transitioning economy have options.
"If someone comes up to me and asks, 'If I lose my job, what is going to happen?' I can say to those workers that we can help," Granholm said. "The Career Transition Program will help make education and training a reality for those who need it."
Granholm, a member of DFCU Financial, said she applauded her credit union's initiative and was proud to collaborate in what she expects will be a multi-year campaign. The state's contribution will include $1.5 million to assist CTP students with the cost of textbooks and another $200,000 for career counseling and placement services. The state has also created a website, www.michigan.gov/newjobs, which provides displaced workers with job placement and training resources.
Under the program, credit unions have agreed to provide loans of up to $10,000 at below market rates (50 basis points under the prevailing rate for federally guaranteed Stafford loans) and forego principal and interest payments for two years. With the rate on Stafford loans at 6.8%, the recommended rate for participating credit unions is 6.3%.
The loans will be used to finance retraining, vocational education or college courses for auto workers who have been impacted by the massive restructuring of the state's three auto companies, Ford, General Motors and DaimlerChrysler, as well as all of the allied parts manufacturers.
Adams, who stepped in to assist DFCU in expanding its program, said many CUs have embraced the idea to provide real solutions to members faced with sudden job loss.
"While credit unions are an integral part of Michigan's economy through good times and bad, the current economic climate challenges us to do even more," he said.
In September, Ford Motor Company announced that it would offer 75,000 North American employees buyout or early retirement packages and lay off another 10,000 salaried employees by the end of next year. The move was similar to cuts made earlier this year by larger rival General Motors Corp. At GM, 34,410 hourly workers accepted buyouts or early retirement offers. Another 2,000 salaried workers were laid off.
Adams said he has been particularly pleased to see that CUs struggling with their own bottom lines are willing to help. "It's a great collaboration of the Granholm administration and the credit union community."
It has also been an opportunity for the league to work closely with a credit union that almost left the fold.
Adams applauded the role of DFCU, which was originally chartered to serve Ford engineers and is located across the street from Ford's corporate headquarters. "We were extremely pleased to see the involvement of our largest credit union, having gone through the conversion attempt that was largely publicized and caused tension between it and the Michigan league. We have a CEO and a management team there who have shown they are capable of stepping up and walking the talk," said Adams, who personally campaigned to discourage the conversion. "My hat is off to them."
The league executive also had praise for the other credit unions that have gotten involved in the program.
"These credit unions are making a significant financial commitment," said Adams. "The credit unions are absorbing the costs of the lost of two years of interest in $40 million of loans."
CUJ Resources
For info on this story:
* Career Transition Program at www.ctpforcumembers.com
* www.michigan.gov/newjobs
Ed Roberts contributed to this report.
