Battle of Republic

I work in Chicago about a block away from the Republic Window and Door factory. In fact, the company I work for leases a corner of the Republic facility for some extra storage space. I have keys to the Republic building, and I’ve spent a lot of hours inside of it. I’ve met some of the workers, and I know the Chief Operating Officer.

If you’ve never heard of Republic Window and Door, pull your head out of the sand and pay attention to the world you live in. On December 2nd, they announced that they would shut their doors at the end of the week and that all of its employees were effectively out of a job. Not only that, but the company announced that there was no money in the pipeline to cover their employee’s last paychecks, their earned vacation time, their pension funds, and their health insurance. Bank of America, who was a major creditor for Republic, had decided to cut all lines of credit with the company, thereby killing any hopes of the employees to receive the monies owed to them by law. Oh, and then there’s the little thing about a law called the WARN Act that requires companies to either provide a 60-day notice of an impending shut-down or compensation for the differential period should a shut-down occur before the 60 days are up. At the time of the shut-down on Friday, December 5th, Republic Window and Door employed almost 250 people. They received a 3-day notice.

I know, I know: there have been hundreds of companies shutting their doors and hundreds of thousands of Americans have lost their jobs in the last few months. We’re at least a year into a recession that shows all signs of turning into a depression before it gets any better. The Republic story isn’t new and it really isn’t news. Except for one thing: the employees of Republic Window and Door are mad as hell, and they’re not going to take it anymore! They staged a sit-in at their shop and they will not leave until they get what they have earned and what the law entitles them to. They have made the statement that if Republic can’t give them what they are owed, then Bank of America, as recipients of the Troubled Asset Relief Program of 2008 (aka the $700 billion Bank Bailout), is obligated to use that money to grant Republic the credit it needs to comply with the laws surrounding their shut-down.

The employees of Republic belong to the United Electrical, Radio, and Machine Workers union. They have become a heroic symbol for union employees and blue-collar workers fighting corporate greed all over America. Illinois state and local politicians called for a business freeze with Bank of America. Even President-elect Obama voiced support for the workers. Opponents of the sit-in, however, wonder why any bank should be obligated to grant credit to a company that has proven itself to be unstable and unable to operate in the current economic environment. And they have an incredibly valid point: you wouldn’t loan money to someone if you knew that they would never be able to pay it back. That’s just stupid. So why should Bank of America be forced to make a bad loan?

I don’t have a great answer to that question. Is it Bank of America’s fault that Republic is failing? On the surface, you’d have to say no. The failure of Republic is primarily tied into the fact that they make windows and doors for new homes, and there just aren’t any new homes being built right now. But other window companies are surviving, so there must be more to it than that. The fact of the matter is that Republic Window and Door received over $9 million in Tax-Incremental Funding (TIF) from the city to help build their facility and get their old shop moved into the new one just about 10 years ago. They blew through all of that money, and then they borrowed so much money from Bank of America that the bank has shut off their line of credit. They had to sell their building to just over a year ago and they now lease the space from the Wrigley company. They’ve been continually downsizing their space in order to reduce the amount of rent they’re paying. I have personally seen the reduction of machinery in the shop in the last couple of months. The short story is simple: Republic is not selling enough windows and doors. Whatever they’ve been doing, they’ve been doing it wrong. Not the union employees: the managers. The salespeople. The corporate stiffs. So why are the employees going after Bank of America?

I believe that the Republic employee’s anger is misguided, but I still applaud them and I fully support their sit-in. Why? One reason is because Bank of America can’t sit back and pretend like they didn’t know what was happening to Republic. They knew that Republic blew through their TIF money. They knew that Republic was swimming in debt: they were the creditors! They should have been able to see that Republic was about to default and that they didn’t have the funds to comply with the laws. Was it their responsibility to make sure that Republic saved enough to pay their employees severance packages? Maybe not legally; but morally, they could have and should have done something about it. But far more importantly than that, I support the Republic workers because I see their actions as the first real challenge to the Bailout Bill. Bank of America has already received $15 billion of that money, and they are expected to receive another $10 billion in the next week. Where is the money going to? What are they using the money for? Why is there no oversight on that spending? If our elected officials are going to throw around a huge pile of taxpayer money, shouldn’t someone pay some attention to it? I thought the purpose of the Bailout was to “free up” money for the purpose of granting credit. As their primary creditor, Bank of America essentially owned Republic. Therefore, they should have the power and the responsibility to make sure that the CEO and the upper managers aren’t walking away with money in their pockets while the employees are getting the shaft. The employees of Republic took a stand that was about more than just their personal situation. It’s about time that someone stood up to the recipients of billions of our tax dollars (remember: 25 billion is the same as 25,000 million) and called them out on how they are spending it.

On December 10th, Bank of America agreed to lend Republic $1.7 million. Along with an additional $400,000 loan from JP Morgan Chase, the employees of Republic Window and Door will receive their vacation and severance packages. Their sit-in was a success. I can only hope that employees of other companies that are experiencing a similar situation will have the courage to do what the Republic employees did: stand up for yourself and don’t stop until you’re heard. This is our country, and that $700 billion is our money. We have an obligation to make sure that it gets used properly, and if sit-ins are what it’s going to take, then all of us need to be ready to pull up a chair.