WEST PALM BEACH, Fla. – Credit unions serving the aerospace industry plan to do what they can to assist what could be hundreds of thousands of laid-off aerospace workers. The airline industry has been the industry most decimated by the terrorist attacks, losing billions of dollars since the tragedy. This doesn’t bode well for the nation as a whole as the industry makes up 10% of the nation’s Gross Domestic Product. Airline executives are asking for a $17.5 billion government bailout to help the reeling industry. Already four major carriers – United, American, Continental and US Airways – have announced job cuts totaling more than 70,000, and aerospace firm Boeing plans 31,000 cuts. This may just be the beginning, as other airlines were set to make announcements at press time. Credit unions serving these companies plan to do their part to help them through what will undoubtedly be a tough financial time of their lives. “We’ve never gone through anything this severe. This is going to be a significant challenge,” said United Airlines Employees CU President/CEO Bob Bream, who emphasized that the $3.4 billion CU is up for the challenge. Bream said the problem is no one is sure how long and how extensive the cuts will be. United job cuts were at 20,000 at press time. “What’s really a large challenge for us is knowing how long of a duration we’re going to have a reduction in the work force. No one seems to know the answer to that,” he said, noting that United’s corporate headquarters does keep him in the loop on layoffs. The CU is mulling a number of procedures to help displaced United employees. They include extending maturities on loans to reduce payments; having members make only interest payments on loans; assisting members in refinancing CU or outside debt to reduce payments; and offering small, interest-rate friendly loans the CU can close quickly to help tide members over until they’re back on their feet. The CU has already given out quick, no-questions-asked $500 loans to members of flight crews who were stranded at airports throughout the country when airspace was shut down. Bream said this is why the CU has substantial reserves, however the CU must also balance the financial interests of the CU when trying to do all it can for members. “We have to be responsible to balance the needs of our members as well as the financial interests of the credit union,” said Bream. Gary Oakland, president/CEO of the $3.7 billion Boeing Employees CU, Tukwila, Wash., said it’s always unfortunate when a Boeing employee loses their job, but handling layoffs is nothing new for BECU. “The aerospace industry has been cyclical throughout history. This will be the fourth or fifth downturn of this magnitude or greater that has occurred since I’ve been CEO,” said Oakland. The CU, a relative veteran in handling large-scale layoffs, has developed a three-hour seminar entitled “Surviving a Layoff.” Oakland said before the laid-off employees can get their finances in order, they need to have the right mindset. “The state-of-mind of the employee is important. They need to know it’s not about them, it’s about the economy,” said Oakland. The seminar helps them do that and then takes them through potential problems to their credit that an interruption of a steady paycheck can cause. Beyond the seminar, the CU has an income interruption program that does things such as allowing members to skip loan payments; provides fast advances of funds for critical needs; consolidates member debt; and adjusts loan payments lower. Oakland said CUs going through this for the first time may worry about doing too much and hurting the CU. “When this happened in the early `80s we looked around and said `oh my gosh, what’s the credit union going to do.’ We’ve learned the credit union survives this, and we need to do what we can to help the members survive because the credit union will be stronger on the other end if you help the members now,” he said. At press time, Boeing layoffs were expected to approach 30,000. The $148 million Continental Federal Credit Union, with 38,000 members representing both Continental Airlines and America West in Phoenix, said it had a healthy capital base and is set to assist however it can. “We’ve been through this twice now so we are prepared,” said Gary Swensson, president of Continental FCU. The CU has begun offering several programs to reduce or defer loan payments on members laid off from the airline and making cash available for living expenses for those suddenly unemployed. It also in some cases is waiving early withdrawal rules to make funds available. Continental, however, has halted a program offering loan pre-approvals on high ticket auto purchases since “this is a program that may not be in the best interest of our members,” said Swensson. “It’s pretty devastating what’s happening to our industry,” said Joe Cirelli, president/CEO of the $540 billion US Airways FCU, Moon Township, Pa. US Airways plans to cut 11,000 jobs. “We’re not in this by ourselves; it’s affecting the whole industry. We’ve tried to do business as usual. We’re very heavily capitalized at 13.5%, so we’re in good shape to continue operating as normal.” US Airways has 46,000 employees, of which about 70% are members of the CU, said Cirelli, who has had a touch of this before with work stoppages. “We had a strike in 1992 and been through many countdowns to work stoppages, so we know what’s involved.” Cirelli emphasized that his CU will not publicize all that it can do for members, such as skipping loan payments; offering interest-only payments; and things the other CUs do. It gladly does all those things, but looks at each member’s situation on a case-by-case basis. “Because of dual incomes now, it’s not as devastating as it appears on the surface to all our members affected. Some need a couple months off of their loan, and we will do that. Rather than go out and say we’ll do all these things, we handle it individually,” said Cirelli. More than half of the CU’s 102,000 members are not employed by US Airways FCU, said Cirelli, so it’s important that those members know the airline layoffs won’t affect their CU. -pgentile@cutimes.com