WICHITA, Kan. – Credit unions serving a key aircraft manufacturer are responding to layoffs in that industry with programs to ease members through the employment crisis. Boeing Wichita Credit Union, for example, is offering laid-off members a 2% rate reduction on auto loans refinanced from other area financial institutions. BWCU and its counterpart in Washington State, Boeing Employees Credit Union, are both offering members stepped up financial counseling and payment flexibility. In mid-September, the Boeing Co., which recently moved its corporate headquarters from Seattle to Chicago, announced it would lay off between 20,000 and 30,000 workers company wide by the end of 2002. It cited declining commercial aircraft sales and, after Sept. 11, prospects for further declines. Boeing employs 199,000 worldwide, including 80,000 in Washington State and 16,300 in the Wichita area. BWCU has approximately 43,000 members and had $92.5 million in assets at the end of 2000. Its membership includes several aircraft employee groups and residents of 46 counties in Eastern Kansas. Based in the Seattle suburb of Tukwilla, BECU is one of the largest credit unions in the country with $3.5 billion in assets and 272,000 members. The credit union has nine branches and another a half-dozen sites at Boeing facilities in the Seattle area, The Boeing layoffs will be gradual, and final numbers are not yet known. So far, however, two waves of 60-day layoff notices have been issued. In October, the company announced that 12,000 jobs would be cut by Dec. 14. Last week, the company announced another 2,900 jobs would be cut and a third round of layoffs would be announced later in December. Of the 14,900 layoffs announced, 6,900 were expected to be lost in the Seattle area and 2.350 in the Wichita area. Observers are expecting that by the time the slashing is done, Wichita will lose about 5,000 workers, while layoffs could end up in the 22,000-range in Washington state. In the Wichita area, other aerospace firms, including Bombardier Aerospace and Raytheon Aircraft, have announced an additional 1,000-plus layoffs. In response, the Wichita credit union reduced rates on auto loans and has, since late September, refinanced 700 car loans at rates between 5 3/4 percent and 6 percent. “We’re trying to be proactive, whether you’re a Boeing employee or not,” said BWCU chief executive officer Gary Regoli. “We want (members) to maintain a line of communications with us.” The credit union is also refinancing existing member loans, or lowering payments to principal only or half the normal payment, if the member has had a good relationship with the CU and reasonable job prospects. Regoli cited the case of one member, an engineer, who was laid off from an aircraft-related company. “He was able to refinance a (car) loan that saved him $80 a month. He said, `You know, that is going to help me so much,’” Regoli said. “That’s the intent. We come out ahead because we’re refinancing a competitor’s loans, the members wins because they’re saving money every month that they can use to make it through this time.” There is some interest-rate risk, Regoli conceded, and he has put a dollar limit on the program, “but, quite frankly, we’re pretty pleased with the weighted average yield that we’ve had with the program and the quality of people who have refinanced with us is just phenomenal.” While in another situation, this kind of rate cut could be viewed as a promotional tactic to gain market share, Regoli, said that is not his focus. “We’re not a charity, but we are a credit union and so this is a time for credit unions to shine,” he said. “If we’re really going to live up to `people helping people,’ then we should step forward.” Boeing Employees Credit Union, headquartered in Tukwilla, Wash., hasn’t gone after refinancing loans as BWCU is, but it, too, is trying to help its members and community. In fact, BECU’s president and CEO Gary Oakland invoked the same axiom as Regoli in mid-October when he announced the launching of the credit union’s stepped-up financial counseling efforts in the wake of the Boeing announcement. “With the current economic climate, many people face an uncertain financial future,” Oakland said. “The philosophy of BECU has always been `people helping people,’ and we would like members to know that BECU is here to help when they are dealing with the financial hardships of a layoff.” BECU spokesman Pat Partington said the credit union is not offering to refinance or make reduced-rate loans but, he said, “We’re going to gauge things in December, when the layoffs start to happen. It’s hard to speculate until December.” Employees were notified of their layoffs 60 days before their last work day. Partington said the member assistance, which includes seminars and one-on-one financial counseling was already in place, but it’s being expanded in reaction to the layoff notice. The “Surviving a Layoff” seminars will cover budgeting, unemployment benefit options, dealing with creditors and health insurance issues. The three-hour seminars will also cover job-hunting techniques and resume writing. One-on-one counseling will offer guidance on debt repayment, budgeting and issues relating to retirement account rollovers. Though not tied to the layoffs, BECU has lowered interest rates on several key products. It lowered the rate on its 11.9% Visa card one percentage point for purchases and cash advances made until Dec. 31. It also ran a limited-time “No Payments for 90 Days” auto loan. Partington said those were “regular campaigns, more a reflection of what’s going on in the economy” not a response to the Boeing layoffs. – [email protected]

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