Does CUNA Mutual Group Still Call WIsconsin Home?

CUNA Mutual Group, a long established and important Madison-based company has moved its legal corporate offices from WIsconsin to Iowa.

Now it is about to enter negotiations with the union that represents many of its workers, Office & Professional Employees International Union (OPEIU) Local 39.  It appears that CUNA Mutual has hired hundreds of employees in Wavery, Iowa and Fort Worth, Texas while laying off hundreds of employees in Madison.

Now  CUNA Mutual is using people at its Madison offices who are contracted employees to other companies and workers with H1B visas.

Stay posted.

Disclosure: I am under contract to OPEIU Local 39.

 

Update: February, 12, 2008:  in some other presentations CUNA Mutual Group, I made some errors. An apology  and correction can be found: An Apology TO CUNA Mutual Group and About those H1B's....

Comments

[Bob]

CUNA, once considered a great place to work in Madison, has been under new management for the last several years and has become hostile toward its union employees. Hundreds of long term employees making good money have been fired and replaced with temporary, contract workers from third world countries. The union went along with all this and sold out to management a long time ago.

My wife worked there for 33 years, her entire working life, had a perfect work record, and was a union employee. She worked her butt off all those years with always the promise from CUNA that she would be well rewarded for her efforts at retirement time. With only two years to go before becoming eligible for retirement with a pension, she was fired and given no option other than working for the temporary service company now doing most of the work at CUNA for one third of what she was making with no vacation, no sick days and no benefits. The temp workers make about $8.00 an hour. Have you seen your insurance rates go down because of all the money CUNA is saving? Of course not, the company management got a big bonus for doing such a great job firing all those people making a living wage while my wife and I now face an uncertain future with her unable to collect the pension and health care she was promised all those years.

The company has no heart, the fired workers were basically told “life sucks, then you die” by the new boss brought in from out of town to fire everyone. So ask yourself; why has service in America gone to hell? Because big business only cares about the bottom line. The management would still be living their jet set lifestyle if they had not fired anyone, the company would show a little less profit each year but the workers would still have good jobs, but they chose to ruin the lives of a thousand people, the ones that made the company what it is today, just to save a few bucks. The way management thinks these days is why all our jobs are being sent overseas or outsourced to overseas call centers or when they can’t send our jobs overseas they bring in people from those same third world countries to steal American jobs and work for poverty wages. I hope CUNA management rots in hell for what they have done.

[Laura C]

When my grandmother visited Madison in the 1970s she went to CUNA to get a tour of the credit union. They spent a whole day with her (not an easy thing to do, believe me). She was very interested in credit unions and I understand that CUNA was one of the first. Is CUNA still a credit union? If so, aren't depositors members who have some say in how CUNA is run?

[Paul]

Laura, CUNA Mutual is not a credit union. It provides services to credit unions and their members.

And no, the members no longer control CUNA Mutual - over the last few years, with structural changes -- a majority of the board of directors do not come from the credit union industry as is the case with Jeff Post, the present head of the organization.

[John]

Please keep in mind that CUNA and CUNA Mutual are separate organizations as is the CUNA World Council of Credit Unions. Unfortunately, CUNA Mutual engaged in a Trojan Horse take-over of the Iowa insurance company several years ago and used the good will of the mutual insurance and credit union world to pull the wool over member's eyes. As George Baily might have said, "They aren't selling, they're buying!" It is a lesson in the need for vigilance by membership and continued demand for transparency and commitment to the Statement of Cooperative Identity.

[Bob]

Jeff Post and the rest of the $14 million CUNA Mutual leadership team have enough on
their plates. The last thing CMIS needs is more turmoil.

In the past few years, CUNA Mutual Group has been through many changes and controversies. The following are excerpts from the Credit Union Journal, Banking Wire, various Wisconsin newspapers and other publications:

August 2004 – Longtime President and CEO Michael Kitchen, one of the most popular figures in the credit union movement, was fired after it was discovered he may have violated federal labor laws during union contract negotiations.

January 2005 – Jeff Post replaces Mike Kitchen as President and CEO.

June 2005 – After over a year of strife, CUNA Mutual finally settles a bitter contract fight with 1,400 union workers.

July 2005 – The National Labor Relations Board finally settles all outstanding issues regarding the labor dispute at CUNA and the ouster of Mike Kitchen.

October 2005 – CUNA Mutual sells its CUNA Mutual Mortgage Corp. unit and announces it will outsource back-office services ranging from housekeeping to printing to its cafeteria.

November 2005 – Jeff Post announces he is considering an unprecedented step for CUNA -- serving customers outside its traditional credit union market. Post said the "grand slam" would be to serve a group like the American Association of Retired Persons. Such a change would be the first time in CUNA Mutual's 70-year history that it served clients outside of credit unions and their customers. Post's other plans include trying to squeeze better returns out of the company's investments, with plans to add $25 million in returns next year and $75 million by 2008.

November 2005 – The makeover of CUNA’s management team is nearly complete as several executive vice president posts are filled with new hires to Jeff Post, and longtime CUNA executives depart. Also, Post says his hand-picked team will be considering every job at CUNA Mutual to decide whether it should be dropped, outsourced or otherwise changed. These changes have led to around 650 layoffs at CUNA as of March 2007.

August 2006 – CUNA Mutual Group breaks ground on its “state-of-the-art customer service model in Fort Worth," a $12 million Customer Operations Center.

August 2006 – CUNA teams up with Producer's Ag Insurance Group -a firm that Jeff Post worked with in the past during his tenure with Firemen's Insurance Fund - to offer crop insurance to farmers. Among some of the other ideas CUNA is exploring is offering laptop insurance for students.

November 2006 – In several interviews Jeff Post announces CUNA is reviewing every aspect of its operations, and spending some $200 million as part of what it calls an "improvement agenda." According to one article:
In a transformation that began a year ago, the company reorganized back-office operations with layoffs and shared services; revamped its sales force by size and type of credit unions instead of product and geography; hired 20 employees to better manage its investments; and is seeking new business that won't come directly through credit unions.

January 2007 – Two of Jeff Post’s subordinates describe CUNA’s “ambitious organizational transformation” that relies on a unique partnership between the IT and service/operations organizations with a goal of "changing the customer experience."

February 2007 – Jeff Post announces projects to sell pension and 401(k) products to “small businesses that are members of credit unions” or “in the open market” and a partnership with large credit unions markets products to members who joined as the result of indirect auto loans. The goal: convert "one-trick ponies" into multiple relationship members.

February 2007 – Jeff Post announces that CUNA Mutual's MEMBERS Capital Advisors has successfully piloted "Investment Advisory Services" with approximately a dozen credit unions in which it uses its market heft of $16 billion in capital and access to Wall Street to deliver an extra 25 to 50 basis points on a credit union's excess capital.

April 2007 – Jeff Post announces more new business ventures for CUNA Mutual. Post said CMG is working on several new products and ideas, including student loans, a way to do sub-prime lending off the balance sheet, and a Hispanic initiative-the latter he termed "something long since past due. We want to make CUNA Mutual competitive. I hope we deliver an uncommon commitment. Many of our competitors say our changes mean we are backing away from credit unions, but nothing could be further from the truth."

April 2007 – In order to manage its $15 million worth of contract workers, CUNA Mutual must pay a vendor, IQNavigator, at least $150,000 annually, plus other costs.

May and June 2007 – CUNA Mutual announces yet more rounds of layoffs, as the company continues to move operations out of Madison and into Iowa and Texas.

In July 2003, while still with Fireman’s Fund Insurance Co., Jeff Post told the San
Francisco Chronicle:
“I'm an actuary by training, and actuaries tend to be the most conservative guys you ever meet. Several years ago I remember hearing friends talk about those dot-com stocks that had doubled in the last three months, but I just couldn't go there. Today, my view of a good return is anything that doesn't have a negative sign in front it. Give me 5 percent. Give me 2 percent. I'm a happy guy.”
But perhaps another quote in the same article sheds some light on Jeff Post’s transformation from “conservative guy” to the man who is overseeing a massive transformation of CUNA Mutual:
Worst mistake? "Probably not moving quickly enough on some decisions at Fireman's. There were a few I wish I would have made faster."
It is time for CUNA Mutual policyholders to tell Jeff Post, who likes muscle cars and frequently uses car analogies, to “slow down.” Jeff’s foot is on the gas pedal down a one way street to demutualization.
By VOTING NO, policyholders can tell Jeff Post to “Think Again,” as he likes to say in his blog at http://www.cunamutual.com/cmg/freeFormDetail/0,1248,14516,00.html.
Jeff Post’s “transformation” of CUNA Mutual has led to some successes, as the company’s net income rose 36 percent in 2006 to $178.1 million, a $47 million increase.
But Post himself said, “We still have a lot of work to do," and he and his management team, in the midst of new products, new alliances and a massive corporate transformation, should focus on the tasks at hand.
CUNA Mutual customers, such as the President of the Wisconsin Credit Union League, have given Jeff Post credit for his “emphasis on the credit union customer.” And that is where his emphasis should stay – not on Iowa as the road to Wall Street.
Despite Post’s and other executives’ oh-so-coy denials:
"We have no plans to demutualize, but the landscape could change."
"What we're looking at is some ‘what if' scenarios," he said. "What if we do have the need for additional capital in the future? Which regulatory environment gives us the greater flexibility? Iowa gives us a slight advantage."
"At this time, our capital is strong and we have no need for outside capital. We're best served by remaining a mutual company. However, the landscape could change in the future as the credit union market continues to change."
"There is no intent to take the company public," Post said, although Iowa's insurance laws make it easier for a mutual insurance company to become a public company or to create a mutual holding company.
Remember this:
Other than forming a mutual holding company and/or demutualizing, there is no legitimate reason for our company to redomesticate to Iowa.
In its two mailings to mutual insurance policyholders, CUNA Mutual mentions the word “demutualize” and its variants over 150 times. Where there’s smoke….
Newsweek columnist Jane Bryant Quinn was not so coy when she called mutual conversions "the mutual insurance grab. Some greedy insurance executives are stripping policyholders of their ownership interest and transferring it to a mutual holding company," she wrote. "The executives get stock; the policyholders get zip."
And we’ll give the final word to Jeff Post himself: "There are huge competitive advantages to STAY MUTUAL," Post said in February 2007.

[Morgan]

Sly and Paul and Katherine Bartlett talked about it last week.

http://podcast.loyalears.com/wtdy.php?task=browse&file_id=2191

[polyethylmermum]

Bob wrote: "Other than forming a mutual holding company and/or demutualizing, there is no legitimate reason for our company to redomesticate to Iowa."

Hmmm...For starters, Iowa is a right-to-work state. Next, go to the IA Dept. of ED website and you will see the following:

Iowa's corporate income tax is a single-factor, nonunitary tax and based only on the percentage of total sales income within the state (e.g., Iowa companies selling all its products outside Iowa pay no Iowa corporate income tax).

Iowa is one of only five states that offers Federal Deductibility. This allows 50 percent deductibility of federal taxes on corporate income tax in Iowa.

Iowa has eliminated the following tax burdens:

No sales or use tax on industrial machinery/equipment/computers
No sales or use tax on computer/peripherals used in the processing or storage of data
No property tax on manufacturing machinery/equipment/computers
No tax assessment on personal property (includes corporate inventories of salable goods, raw materials and goods in process)

Consider these factors when answering the push/pull questionaire at the top of this blog. Then add in the "guilty-until-proven-innocent" risk contribution theory decision from our esteemed State Supreme Court which prompted the Wall Street Journal to essentially describe WI as litigation hell.

Now add a multi-billion dollar structural deficit, zippo rainy day fund, the pending Menasha case, the case that could reverse the raid on the patients comp fund, and the prospect of Healthy Wisconsin (designed to get from 98% coverage -- after Doyle's expanded BadgerCare -- to 99% of the population -- even HW advocates admit 1% will not be covered) and those bad vibes will become an earthquake.

[Richard C. VandenBrul]

Jeff Post eliminated the field force in 2006.

I was among those who retired.

Jeff's action cost me over $500000 in lost pension and compensation.

Those of us who worked for the benefit of CUNA Mutual Group are working to take as much business away as we can.

In this way we will weaken the company and get Jeff and his minions fired!

The Empire Strikes Back!

[retriree]

for a company that claims to have some expertise and sophistication, cuna mutual does seem to have some problems with implementing and handling what would seem to be simple tasks. decision to terminate contribution for health coverage for retirees effective 12-31-08 and sending notice to retirees shortly before xmas could hardly be viewed as timely notice. then the comment that further details would be forthcoming was also apparently delayed by confussion with staff as how to proceed. cuna gave retirees a check that basically covered a year's premium with an added amount to cover federal taxes. checks received 12-31-08 regular mail. in my case, unable to deposit same day since mail arrived late afternoon. deposited check first business day jan 09 and bank put hold on item for 7 days. so i actually dont have money until 2009, but cuna mutual in a rush to expense payments for 2008 sends checks at last minute. then the company reports income to retirees on wrong form to irs. also pension payments to retirees for jan 2009 delayed and explanation is computer problems. retirees are given option to participate and remain in group plan. premium will be deducted from monthly pension payments. for one reason or another cuna is unable to implement deduction from pension payments beginning jan 09. so the company notifies retirees that cuna will make contributions toward premium for months of jan and feb 09. retirees in turn must forward cuna a check for the contributions before end of jan with request to continue group coverage. suppose cuna will begin full premium deductions in march 09, but maybe there will be another computer problem. back to the wrong form sent to irs. cuna sent a 1099-misc form to irs and retirees. irs says form is for self employed individuals. last word from cuna the issue will be resolved today, feb 13th and letters sent to retirees on the 13th. not a good omen - friday the 13th. adding insult to injury, since the company did not deduct state and federal taxes and pushed hard to get disbursements in year 2008, retirees are looking at the possibilty of paying penalties to the feds and state for underpayment of tax. hopefully this fiasco is not reprenentative of cuna's other functions.

[Dissappointed at CMG]

Still work for cuna mutual group. Under Kitchen the executive leadership was strong and treated its employees like part of a family. That is gone. The company that I had strong devotion to is gone. Post and the leadership (term used lightly here) team he has brought in have destroyed a once very good company that had devotion from its customer base and its employees. The current leadership have an unbeleivable level of arrogance. To the point that last year their arrogance lost the company about 100 million due to Trunzo's inability to ask questions about things that he later admitted he knew nothing about. Has he been held accountable for this major blow up, no. David Marks was held up like a god when he increased the return on our general account by 1% through heavy exposure to areas our previous money managers were conservative with. Turned out to be the cmo's etc. He lost at least 40 million. Has he been held accountable based on how it performed or at least how it performed against where it would have been invested under our previous folks, no. Post decided to buy a new corporate jet for over $35 million so he and his group wouldnt have to stop for refueling and some of those folks havent actually moved near the home office yet. Post may have moved but still calls his previous state home (cant blame him there. CA vs. WI hmmm.)

Devotion has left the building, open discussion has left the building. Yes men abound and no one dare tell the emperor he has no clothes.

I currently report to the most spineless manager I have ever met in my life. He has no devotion to us and we have none to him.

This weekend we learned we may lose our pension, our 401k match is on the chopping block, health insurance premiums are going up again, wages will remain frozen, furloughs will begin, etc.

This in an effort to save $50 million this year. I have an idea or two: Sell the plane, fire Trunzo and Marks, reduce posts salary to what we paid Kitchen. Right there is pretty much it. Oh and you could also get rid of the 3 or 4 layers of management created when post went on his firing spree. Kitchen may have had silos in the company but he didnt have needless layers of high paid management ( seriously. I am talking about meeting goers here that earn 150k+) protecting him from the peasants.

Enough of my rant. I think you get the point

[jav]

I was considering rolling ira money over to cuna, but now am reconsidering if I should. I am a member of a credit union but never had dealings with cuna, so I googled to find out about the company. It's been a eye opener. I was worried about it being a safe and secure place.

[Jeff Post]

I have a pending law suit agains CUNA Mutual Group. I was fired for helping union workers develop career paths. Customer Operations is both a demoralizing and poorly run organization. Great job Tom Martorana!

[Chester Samuels]

Wow with a bunch of folks like you guys I must say I cannot blame them for showing you the door. It seems like the major beef is that the CEO does not see the need for union labor in a financial services firm. I must say I agree.

[Bad Deal]

I've dealt with CUNA Mutual as a customer for my Mom's insurance. They have changed their stories, changed their dates, done all kinds of things that under a business microscope would raise ALOT of flags! I'd stay away as a customer!!