Chicago workers stand up against Bank of America

[ctbering]

Aldermen demand City Hall stop working with Bank of America
Blagojevich halts state work with Bank of America over sit-in

December 8, 2008
BY FRAN SPIELMAN City Hall Reporter
Chicago aldermen turned up the heat at both ends today on behalf of laid off workers at Republic Windows & Doors whose sit-in at the shuttered Goose Island plant “struck a chord” heard around the nation.

Flanked by union leaders at a news conference, more than a dozen aldermen demanded that City Hall divest itself of funds deposited at Bank of America — and stop approving zoning changes sought by the bank and its subsidiaries — in retaliation for the bank’s decision to cut off Republic’s line of credit

Gov. Blagojevich visits with laid-off workers at Republic Windows & Doors on Monday. Blagojevich called for state agencies to stop doing business with Bank of America until the bank restores credit to Republic.
(Brian Jackson/Sun-Times

Bank of America would also be prohibited from riding the gravy train of pinstripe patronage generated by city bond deals under an ordinance drafted in response to the Republic shut-down.

The aldermen also vowed to hold City Council hearings and explore “every legal option” to force Republic to re-pay $9.3 million in tax-increment financing (TIF) funds used to build the Goose Island plant now occupied by laid-off workers.

Ald. Joe Moore (49th) said he was incensed to learn that Republic executives have formed a limited liability corporation that has purchased a similar plant in western Iowa, where labor is cheaper. The TIF subsidy was paid in 2002 and 2003.

“They accepted city tax dollars on the basis that they were going to remain in the city of Chicago. To accept these city tax dollars and do an about-face and run to Iowa to pay workers there less wages and fewer benefits runs contrary to the whole purpose of tax-increment-financing,” Moore said.

The Rev. Jesse Jackson Sr., who attended the news conference, agreed that “all legal leverages should be employed to stop this violation of workers” and “put TIF beneficiaries across the board on notice.”

Last week, Bank of America cut off a line credit to Republic citing declining sales, prompting the Goose Island company to shut down and lay off its 250 workers with a mere three days’ notice.

The workers have attracted national attention -- and turned Republic and Bank of America into poster children for corporate greed -- by conducting a sit-in at the plant until they are paid the severence and earned vacation pay required by law.

"This obviously struck a chord. É These workers said, 'Enough is enough.' They sat down. And everybody across the country paid attention É because everybody knows it's wrong. We have a fight here right now for these workers. They need to win -- and they will win," said Carl Rosen, president of the union that represents the laid-off workers.

He added, “At the end of this, corporate executives who were involved in Republic are gonna land on their feet. They’re gonna have jobs. They might even have other companies. They’re still gonna be wealthy. Bank of America is still gonna be wealthy. They’re wealthy, in part, because of a lot of taxpayer dollars. These workers just want to earn a living.”

Bank of America has insisted it is not responsible for Republic’s financial obligations to its employees.

But, aldermen and union leaders don’t see it that way. Not when Bank of America is using $34 billion in loans and grants from the Wall Street bailout to “expand its financial empire.”

“At the very least, these workers need to be paid what they earned. That’s what’s fair and that’s what’s right,” said Tom Balanoff, president of SEIU’s Illinois Council.

“But, what’s happening there at Republic is a much bigger story than just these workers getting what they deserve. This is really a broader question of, what is our recovery really about? Is this gonna be a top-down recovery? Or is it gonna be a bottom-up recovery? Are we gonna give billions of dollars to the bankers who put us in this mess already? Or are we gonna use that money to have a recovery that lifts up working families?”

Also on Monday, Gov. Blagoevich met with laid-off Republic employees, then did his part to help them — by ordering state agencies to stop doing business with Bank of America until the bank restores credit to Republic Windows & Doors.

[carjon]

And the Governor is now in jail.

[M8s]

Originally Posted by ctbering

Bank of America would also be prohibited from riding the gravy train of pinstripe patronage generated by city bond deals under an ordinance drafted in response to the Republic shut-down.

What a crock!

Blagojevich was arrested this morning on charges of influence peddling, trying to force companies that got State contracts to pay him (or his family or campaign committee) kickbacks. Prosecutors even have tapes of the Governor trying to sell, to the highest bidder, the Senate seat vacated by Obama. He's probably angry because BoA refused to pay up. I hope BoA testified against him in the grand jury proceeding.

The FED is requiring banks to take money from the bailout fund. Wells Fargo tried to refuse the money and were told they had to take it. I don't know if that's the case with BoA but it could be.

Does anyone think it's a good idea to force Banks to make bad loans? Bad loans are what drove the economy into this pickle in the first place. Even the Republic executives feel that the company is unredeemable - that's why they moved some of the business to PA.

I'm sorry for all the laid-off workers, especially in these difficult times. But Republic agreed to these loan terms when they borrowed the money and now they have to live with them. That's the way capitalism and the economy is supposed to work.

[thepolarcrew]

As for bad loans, no, banks shouldn't be force fed unless they need it. Where were they when Lehman Bro went down? Selective memory.

If they they want to force money on people, my account is available.

[TonyPSchaefer]

The way I heard this story - and keep in mind that I was listening to Chicago radio about a Chicago story - is that the workers did not originally start their sit-in in protest to Bank of America. They started their sit-in last week when they were all let go unexpectedly without severance of any kind. This is against union agreements.

The company responded that they had to shut down because they ran out of money (but didn't file bankruptcy) and they couldn't afford severance because their loan request from Bank of America was denied. Bank of America has responded that they are not responsible for the company shutting down and that quite frankly they didn't think it a good investment to loan money to a business that's going out of business.

So I now find it interesting to read that the workers are united against Bank of America.

[JSH]

So if I understand the chain of events correctly:

• City of Chicago gives Republic $9.3 million in 2002 and 2003 to build a factory in Chicago.
• Republic builds plant and hires ~250 people
• Republic's sales start to fall hurting their balance sheet
• Bank of America cuts of their line of credit (which they are most likely using to cover day to day expenses like buying material and paying employees)
• Republic shuts down due to lack of funds
• Some executives from Republic form a new LLC to start a plant in Iowa
• People get really pissed at Bank of America?

I'm not sure how Bank of America is the fall guy here. It's the the Republic executives that have decided to abandon the company and breach their contract with union. The contract is useless now that the company is no longer operating, they will have to take up there severance claim with the bankruptcy court along with the rest of Republic's creditors including Bank of America.

Now it's pretty crappy for the executives to abandon Republic and form a new company but most likely perfectly legal. In the eyes of the law, Republic corp is a stand alone person separate from the shareholders. In bankruptcy, the shareholders will loose their equity in the company but not their personal funds held outside of the company.

[FL_Prius_Driver]

I read the article multiple times trying to figure out what worthy comments or lessons could be learned from this. (The last people to blame or criticize are the workers.)

It finally breaks through my thick skull. It's the "payments" to have the company operate in a specific location. Taking taxpayer money and bribing (legally) company executives is a bad thing. It's exactly how sports team owners manipulate various cities to get taxpayer money to add to their bottom line. The workers are innocent, the company owners bear some responsibility, BoA is hardly responsible. The city can solve the problem immediately by giving the company vastly bigger "payments" right now. Why don't they? (We all know the answer).

It also is a small preview of how the $700 Billion bailout money will cause more problems downstream than solve now.

[tleonhar]

It looks like the workers win out in this.
Chicago workers win: Bank of America to extend credit to plant that suddenly closed
At least early reports...

[M8s]

Originally Posted by tleonhar

It looks like the workers win out in this.
Chicago workers win: Bank of America to extend credit to plant that suddenly closed
At least early reports...

I just read that same article. Looks like BoA is going to give them enough dough to pay the workers and that's it. It may make sense from a PR perspective but it just reinforces the power of the collective whine.

[ctbering]

For all of the dissenters please read the headline...it did not mention the pathetic governor we have who has been under federal investigation for years. ...and please for the BoA supporters, keep in mind they are participants in the bailout.......why are they hoarding the money? There is no accountability with the bailout even though the point of the bail out was to provide money to companies like this......thank you Mr. President, don't let the door slam you on the way out the door.....or better yet let it slam you..