Tuesday, December 09, 2008

More On Republic Window and Doors

The employees are still occupying that company in Chicago, still waiting for their back vacation and their severance pay after the owners of Republic Window and Doors suddenly closed the business down. (For the initial story, see this post.)

Today's NY Times has the latest, and the story is becoming more complicated and convoluted. Initially, the company claimed it couldn't pay the workers because the bank which holds its line of credit, Bank of America, refused to extend the money. That decision came after BofA had received $15 billion from the federal government to "loosen" credit.

The Governor of Illinois has proposed a little action against the bank:

Gov. Rod R. Blagojevich, who met with the workers Monday morning, said the State of Illinois was suspending its business with the Bank of America, Republic Windows’ lenders, and that the Illinois Department of Labor was poised to file a complaint over the plant closing if need be. Political leaders on the Chicago City Council and in Cook County threatened similar actions. Representative Luis V. Gutierrez said he was encouraging the Department of Labor and the Department of Justice to investigate. “Families are already struggling to keep afloat,” Mr. Blagojevich

Now that's pretty solid way to put some pressure on the bank to loosen up that credit with some of the federal money they just received. Here's the problem: Gov. Blagojevich has just been picked up and indicted for corruption by the Justice Department. It's hard to tell just what impact Blagojevich's pronouncement from yesterday will have today.

But there is indeed more to the story. Apparently the company's owners had intended all along to close down the factory in January anyway, and at least some of the employees suspected that what was coming was the shuttering of the Chicago business and the opening of a new business elsewhere:

Late Monday, the company released a statement that indicated that it had known since at least mid-October that it intended to close the factory by January. The statement suggested that it had gone back and forth with Bank of America for more than a month, but that the bank had rejected several of its “wind down” plans as well as the company’s request for financing to pay workers’ owed vacation.

The statement also revealed that the family of Richard Gillman, once a minority shareholder who in 2006 and 2007 bought out Republic, last month formed a new window business — Echo Windows LLC. All along, workers here said they feared the owners were shutting down to reopen a cheaper operation somewhere else. A trade publication reported last week that Echo had recently bought a window manufacturing plant in Red Oak, Iowa. No one from Republic could be reached for comment.

It looks like the Bank of America is not the only villain in this piece. This story is beginning to assume nightmare proportions, if only because it appears to exemplify how business is done in this country. And once again, labor is left holding the bag.

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Blogger Fraud Guy said...

Sound like some businesses I know that have gone through serial bankruptcy. The business owners stay the same, but their corporations change, and they stay as a restaurant in the same location for years at a time.

Most of these situations are open secrets to the neighbors, but no one asks them.

And these businesses are wondering why no one can afford their products any more. Maybe they should ask the workers who they let go?

8:14 PM  

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