Kitchen Firing Has Many Implications

Don’t ever underestimate the influence of labor unions, especially if you are a CEO. Many years ago, as part of the fallout of CUNA’s one and only strike by members of OPEIU Local 39, the CUNA managing director (president/CEO) was given his walking papers. On August 2nd of this year, CUNA Mutual Group president/CEO Mike Kitchen was told to pack his bags because of an admitted error in judgment connected directly to the current tense situation involving, you guessed it, OPEIU Local 39. As every CEO with a union shop knows (or should know), management may not interfere with the collective bargaining process. Kitchen was charged with doing just that after voluntarily disclosing that he offered $1,000 of his own money to a dissident group of CMG union employees looking for advice on ways to go their own way. They declined it. Kitchen thought that a thousand personal bucks with no strings attached would help them get some independent legal advice. To make matters worse for him, he sent out an e-mail to employees that could easily be viewed as anti-union. It is hard to believe that someone as smart as Kitchen proved to be leading CUNA Mutual since 1995 didn’t know better than to get personally involved in any activity that could be interpreted as trying to weaken or even eliminate the union as some have charged. It is much easier to believe that he was set up. And that he trusted someone on his staff he should not have. Maybe someone who saw an opportunity to use the ongoing labor dispute to get rid of him? Which leads to this observation: what you won’t read anywhere is that if the truth were told, nothing would make many top people at CUNA Mutual and CUNA happier than if the union quietly disappeared. Never will they admit it, but these two groups were secretly envious when employees at CUNA Credit Union decertified the union about two years ago. The full story may never come out. But it does seem strange that a respected CEO, who has been the object of continual professional and personal praise, especially over the last couple of years, would fall so far from grace so fast. Of course like any CEO, he had run ins with several of his top executives, some large credit unions, and even an occasional (former) board member because of the way he handled (mishandled?) a controversial decision. Of course union officials never really liked him. Acknowledging that what he did was not only wrong, but stupid, doesn’t the punishment, unceremoniously booting him out the back door like a common criminal, nevertheless seem more than a little harsh? Were there any other options? Yes, at least three but they have been kept very hush, hush. As is usually the case in this type of situation, everyone involved has been sworn to secrecy. As the Mike Kitchen scenario continues to play out over the next weeks and months, you can be sure that both Kitchen as well as his many accomplishments at CUNA Mutual and on behalf of credit unions around the world will very quickly be forgotten. That’s just the way high profile firings work. But Kitchen did establish a track record that deserves to be remembered and that shouldn’t be ignored. He transformed CUNA Mutual from a pretty basic credit union insurance company sleeping giant into a very successful diversified financial services firm. He filled the CU pipeline with dozens of new products, services, and delivery systems, some created in-house, others brought to the marketplace through skillful alliances with best of breed partnerships. Although during his nine years at the helm some credit union folks had trouble relating to his distinct personality, his ever widening leadership role, and his management style, there was never any doubt that the betterment of credit unions was always upper most in his mind. Will Mike Kitchen ride off into the sunset with his many awards and accolades in hand, perhaps returning with his dual citizenship to his native Canada? Don’t count on it. Kitchen had no employment agreement and thus has no non-compete clause hanging over his head. He could turn up tomorrow in an influential position with a competitor. Unless of course, as is often the case, the board worked out a secret deal involving future payouts that would serve to keep him on a short leash. Meanwhile, as CUNA Mutual executives and the board pick up the pieces, they still have OPEIU Local 39 to deal with. As far as getting a new contract in place, the union is now firmly in the driver’s seat and knows it. And what of Kitchen’s replacement? Who will fill his big shoes? My best guess is a scenario that would see CUNA CEO Dan Mica leaving the hassles of running the major credit union trade association for greener pastures. Far fetched? Mica has already made noises that he doesn’t expect to be at CUNA when he reaches the gold watch and bronze plaque age of 65. But he is also not the type to ever simply quit and go fishing. Remember, Mica once worked for an insurance trade group and is still well connected. Remember, too, that CUNA Mutual has become far more involved in the legislative and advocacy process under Kitchen which would be right up Mica’s alley. CMG’s lead role in the ongoing struggle with IRS concerning UBIT (Unrelated Business Income Tax) is but one example. And for sure don’t overlook the fact that although Mica already draws a substantial paycheck, it is a far cry from what the CUNA Mutual CEO position currently pays. But who then could possibly replace a guy like Mica? Dennis Dollar is ready, willing, and able. It could happen. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected].