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MADISON, Wis. – CUNA Mutual endured one of its most bitter battles with its union ever in 2005. For over a year, the company and the Office of Professional and International Employees Local 39 sparred over a new collective bargaining agreement. The battle was very public. It included picketing at not only the company’s headquarters in Madison, but also at some of its board members’ homes and the credit unions they run. The union initiated what’s called a “corporate campaign”, which essentially is a union tactic designed to bring the battle public as well as get the company’s customers involved it the dispute. On a number of occasions the union sent post cards to CUNA Mutual credit union clients urging them to put pressure on the board to get a contract done, while maintaining it only wanted what was best for CUNA Mutual clients. There were some strange tactics as well. For example, the union sent hundreds of Valentine’s Day cards to CUNA Mutual Chairman Loretta Burd, asking her to “have a heart” and help get a new contract in place. Throughout the dispute, still relatively new CUNA Mutual CEO Jeff Post continued to say that changes were needed on the labor front to ensure the company stays competitive into the future. He cited rising healthcare costs, above average wages and hours worked as issues that needed to be addressed. The union’s main argument was that it forewent raises in the previous two years to assist the company financially, and it wanted to be rewarded for its dedication. One of the stickiest issues was the company’s use of outsourcing. The company contended that it had no hard plans for doing more outsourcing but needed the option going forward. The union was strong on this point, and would not give in for over a year. Finally, with some assistance from OPEIU International CEO Mike Goodwin, a deal was struck in late June that saw both sides compromise. The company gave in on wages. The new contract calls for a 15% pay hike for union employees over the four-year life of the contract. That includes 4% in back pay, 4% for April ’05, 4% in April ’06, and 3% in April ’07. The contract also moves two-thirds of union employees from a 34.5 hour week to a 37.5 hour week. On the healthcare issue, union employees were moved on to management’s plan, which offers them fewer plan options, but will save the money company. The union’s big concession came on the outsourcing issue. The union gave up its right to negotiate or grieve on outsourcing moves, something it said all along it would never do. But the new contract wasn’t the end of the headlines at CUNA Mutual. Starting in November, the company announced a series of layoffs in what it describes as a three-year restructuring plan designed to make the company more efficient and responsive to its credit union clients. So far the company has laid off approximately 420 employees, and is using its new outsourcing power by outsourcing some back-office functions. CUNA Mutual plans to consolidate its 36 call centers and give managers more narrow territories to develop expertise in specific product areas. The company readily admits that it has not been as customer friendly and responsive as it needs to be. CEO Post described the company as using a “silo” approach in the past with products. There in essence were strictly segmented product territories throughout the company, all with their own infrastructure. He plans to abolish the silo approach. Post so far has not held back on making tough decisions, including selling the company’s mortgage unit (see related item on page 41), and it appears there will be a lot of changes over the next three years. [email protected]

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