"Invest in America"
Accelerates Auto Sales, Loans
Credit Unions nationwide have partnered with GM and Chrysler to give domestic auto sales a much needed boost, while loans grow by leaps and bounds.
The current economic crisis has had a strong impact on an already struggling Michigan, but credit unions have weathered the storm and remain well-capitalized with money to lend. With this in mind, and with the goal of tying trustworthy credit union lending to economic recovery, the "Invest in America" partnership was born.
"'Invest in America' was in development during the earlier stages of the current economic crisis," said David Adams, MCUL/CUcorp president and CEO. "As the situation worsened for our economy and the Big Three, the rollout of this partnership ended up being about as relevant and vital as it could have been."
The program, created by CUcorp, unites credit unions with domestic automakers and rewards consumers for using credit union financing to purchase American-made vehicles. The goal is threefold: boost the sale of domestic-made autos; encourage consumers to utilize credit union auto loans; and raise awareness of credit unions to increase membership and develop stronger relationships with auto dealerships.
Much like the "Credit Union Difference" cooperative advertising initiative that continues its rollout into 2009 –and now features "Invest in America" in its advertisements – the program was conceived at perhaps the single most opportune time for credit unions in recent history. Consumers are looking for trustworthy financial institutions that haven't been "bailed out" by taxpayer money. "Invest in America" invites them to be a part of a well-capitalized credit union system with low rates and personal service, while getting access to affordable financing along with employee pricing and other discounts on domestic automobiles. While other lenders have been forced to retrench due to significant balance sheet risks and other problems from the U.S. credit crisis, credit unions have money to lend – over $160 billion nationwide.
"Credit unions stand ready to tackle the economic challenges facing this country right now, and ‘Invest in America' helps send that message clearly," said Adams. "This program helps consumers understand that there are trusted and secure financial institutions during this time of economic uncertainty that are ready to lend, and also gives a badly needed boost to the domestic auto industry that is seeing its share of high-profile struggles."
In Michigan, many credit unions have experienced great success with the program in terms of auto loan growth and relationships with auto dealers. For example, Trenton FCU saw its auto loans increase significantly – even issuing ten in one day.
"Local auto dealerships heard about it and they were interested," said Trenton FCU President/CEO Jon Looman. "Some of them did not give strong consideration to our credit union for financing vehicle purchases in the past. Now we've become one of their primary choices and a viable option. These are the same dealerships that have been struggling in a difficult economic climate, in large part because they haven't been able to find auto financing for their customers.
"'Invest in America' was the right program at the right time for us," Looman added. "Our loans are up dramatically through this program. For January, our total loans were up a little over a million dollars. We saw very significant growth in November and December as well."
The pilot program launched Dec. 9 with GM on board in four Midwestern states, and was announced through a news release and conference call with reporters. Chrysler joined "Invest in America" soon after with a pilot program in eight additional states, and the result was "a significant sales lift" according to Steven Landry, Chrysler executive vice president of North American Sales. "Financing is a critical concern right now, and the program provides considerable value to our customers and the economy," he said. According to Autocount, an Experian company, credit union financing accounted for over 25 percent of all vehicle loans in January, compared to 15 percent one year earlier. The market share has been steadily climbing since March of 2008.
Successful auto sales and significant growth in credit union auto lending led to the unveiling of a nationwide pilot program, which gave 90 million credit union members across the country access to the auto discounts and further pushed the credit union brand into the national spotlight. Early in March, CUcorp reported that "Invest in America" had closed an estimated 40,000 vehicle sales, at least 90 percent of which were financed through credit unions. This equated to an estimated $720 million in new credit union loans. At www.lovemycreditunion.org, the newly redesigned Web site providing consumers and media with more information on the program, a counter keeps track of vehicles sold which as of early March stands more than 43,000.
The partnership has not only yielded tangible success in the form of auto sales and lending, but is also helping create a positive public perception of credit unions in a tough Michigan and national economy, according to Omni Community CU President/CEO Ted Parsons.
"The fact that the League has taken the initiative to form this partnership with Chrysler and GM is a very proactive step in helping Michigan and in helping the Big Three survive," Parsons said. "I think it puts us on the national stage as being part of the solution in what is a very challenging environment for everyone."
As "Invest in America" has progressed it has added more partners including GroovCar, CUNA Mutual, AAA and CUDL have partnered with CUcorp to help link credit union members with domestic automobiles and loans, as well as to promote the program. To date, 40 state credit union leagues and more than 850 credit unions are actively marketing the program. CUcorp also hired Kim Irwin, a manager at Ford for more than 22 years, to serve as a vice president in charge of the program to handle contract management with GM and Chrysler as well as the addition of further membership enhancement programs.
Invest in America Gives Credit Unions Significant Media Boost
To promote "Invest in America," MCUL, GM and Chrysler sent out joint news releases and held conference calls with reporters to spread the word on the nature of the program and eventually, its sales and lending success. Although the organizations involved knew the program was unique and relevant in the current economy, nobody could have anticipated the scope of the news media's reaction in Michigan and at the national level.
The day following the launch of the initial GM pilot program, news outlets began running with the story. An Associated Press article received the most attention, finding its way into Forbes magazine and CNNmoney.com. Ultimately, "Invest in America" saw coverage in more than 100 newspapers, radio and television stations and magazines. The most high profile stories ran in the Wall Street Journal, the Chicago Tribune, and USA Today. Michigan news outlets also contacted several credit unions individually to speak with CEOs.
As Chrysler joined the partnership and the pilot program went national, word of "Invest in America" continued to spread and credit union leaders in Michigan and across the country, from New Jersey to New Mexico, were speaking with newspapers and television stations about the program's benefits. More recent articles have been unsolicited – media are picking up the story even without contact from credit unions.
"We've been very pleased with the amount of media attention ‘Invest in America' has received during each of its stages thus far," said MCUL President/CEO David Adams. "Perhaps most valuable, though, are the relationships we've been able to create with the news media that will be beneficial in the long-term. Now that more people are familiar with credit unions and how they operate as financial institutions, more media outlets will think of credit union leaders as sources of financial information."