In Illinois, Another Workers' Rebellion Flares Up Against 'Banksters' Greed
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Nine months have passed since workers at Republic Windows and Doors occupied their Chicago factory, demanded the severance and vacation pay owed them and ultimately pursuaded Bank of America and JPMorgan Chase to put up the funds.
It was heralded as a potential watershed in modern U.S. labor relations, and now is a natural time to ask what fruits that struggle has yielded.
There has not been an onslaught of factory occupations or worker uprisings. But there is at least one ongoing campaign that is inspired by, and in many ways parallel to, the Republic Windows action -- a campaign that's more wide-ranging and ambitious to boot.
That would be the "Roadblock to Recovery" campaign launched by Jobs with Justice and the United Electrical, Radio and Machine Workers of America (UE) union of Republic Windows fame, targeting Wells Fargo bank for failing to extend credit to struggling businesses after receiving federal bailout money.
Like Bank of America, Wells Fargo received $25 billion in taxpayer bailout funds last fall (Bank of America later received an additional $20 billion). Now the Roadblock to Recovery campaign is taking a page from the Republic Windows playbook and demanding Wells Fargo show taxpayers some ground-level results of their investment.
On July 9, a dozen UE workers from the Quad City Die Casting factory in Moline, Ill., blocked a road outside Wells Fargo's local headquarters. About 100 employees in this industrial heartland city along the Mississippi River are likely to lose their jobs this month unless Wells Fargo, the company's major creditor, extends financing until the company can find a buyer. The workers refused to leave the street until they were peacefully arrested and later paid $75 fines.
On May 11, the Quad City workers got notice that the 60-year-old company, which makes metal machine parts, would close on July 12. A Chicago-area management company, High Ridge Partners, is essentially running the company under a state law that facilitates liquidation without declaring bankruptcy.
UE union officials say High Ridge reports to Wells Fargo. High Ridge did not return calls for this story. A Quad City Die Casting spokesperson declined to comment, and Wells Fargo spokeswoman Angela Kaipust said, "Wells Fargo is not involved in making decisions about the day-to-day finances and operations of Quad City Die Casting. We cannot comment further because our customer relationships are confidential."
Meanwhile, in an unfair-labor-practices charge filed July 7 with the National Labor Relations Board, the union alleges the company or its agents have violated their collective-bargaining agreement with the workers.
Workers' health insurance was terminated on May 13, with workers instead given a lump-sum payment that is not enough to pay for most families' medical care. The company or its "officers, agents and representatives," the charge says, is also refusing to pay medical bills incurred when employees did have health insurance, according to UE international rep Leah Fried, leaving them stuck with unexpected bills as they are about to lose their jobs.
As at Republic Windows, Quad City Die Casting terminated workers' vacation benefits, meaning they will not get accrued vacation pay. And the NLRB complaint alleges that in retaliation for demanding their full vacation pay, the company or its representatives terminated a floating holiday guaranteed in the contract.
Additionally, management did not institute a contractually mandated 2 percent raise in June. Fried noted that even if the company closes as planned, the 2 percent raise would provide a little extra income to cash-strapped workers and would affect the level of unemployment compensation they are granted.
Although times are tough, workers and union leaders don't think the company needs to close.
"I was in shock," said Deb Johann, 53, who has worked at the factory for 31 years. "People were calling each other saying, ‘What the hell!' Now we have orders piling up because our customers are stockpiling."
In fact, the closing date was delayed until late August, because of all the orders. Workers and union officials think Wells Fargo is taking the easy way out, opting for quick money through liquidation rather than extending enough credit to allow the company to find new investors.
Fried said the company was profitable as recently as last fall. The company makes aluminum, zinc and other metal parts for farm machinery, cars and other vehicles, and could perhaps ride the green jobs wave by making parts for wind turbines, she said.
"Orders were dropping just because demand is down right now, but their customers weren't going anywhere," Fried said. "This company certainly could be around another 60 years, given the chance. The problem here is that Wells Fargo is calling the shots, and they're making it impossible for the company to continue by pulling the financing rather than allowing them to look for new investors.
"We're talking tens of thousands, not even millions of dollars, on a monthly basis. That's nothing to Wells Fargo; it could be done."
A closing would mean about 100 workers would lose jobs many had held for decades (about 80 are members of UE Local 1174). The union estimates the closing would also mean $6.1 million lost annually in wages and tax revenue.
"It affects the whole community," said Johann, noting that other major employers in the Quad Cities, including John Deere and Alcoa, have made major layoffs. "American people want to know what these banks did with the bailout money. They should be using it to help small businesses like Quad City Die Casting stay alive."
Quad City Die Casting's parent company, QuadCast Inc., has operations in three locations, including Red Oak, Iowa, coincidentally the same town where Republic Windows owner Richard Gillman acquired, and then abruptly closed, another window-and-door factory, after secretly moving Republic Windows' equipment there.
Quad City Die Casting employees have expressed sympathy for company owner Drew Debrey, whose father, Andrew, founded the company in 1949. They blame the bank for the impending liquidation.
On July 30, UE leaders from several locals nationwide delivered a 2-inch-tall stack of petitions in support of Quad City workers to Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, and Rep. Barney Frank, D-Mass., who chairs the House Financial Services Committee.
Wells Fargo will be among the primary targets of a week of nationwide events starting Sept. 24 and highlighting what they are calling the "bailout bandits," around the one-year anniversary of TARP, the Troubled-Assets Relief Program.
Wells Fargo is one of the country's 30 largest employers and one of its largest financial-services companies, according to the company's Web site, with a stock market value of $100 billion.
Wells Fargo executives vehemently protested the terms of TARP bailout funds, and then decried the government's stress tests, with bank Chairman Richard Kovacevich calling them "asinine."
In June, it was announced that Wells Fargo was not among the 10 major banks repaying TARP funds, largely because of its takeover of troubled bank Wachovia, which made it the country's largest banking branch network. Wells Fargo needs to raise more buffer capital and issue more debt without government backing to prove it is ready to pay back TARP funds, under the program's terms.
Industry pundits describe Wells Fargo as uncooperative with federal banking regulators. Last week, Wells Fargo drew heat for skirting TARP regulations against increasing executive pay. The bank gave top executives millions of dollars worth of company stock, which they can sell once the TARP funds are repaid.
Meanwhile, Quad City Die Casting workers aren't the only ones who have threatened Wells Fargo with civil disobedience inspired by the Republic Windows struggle.
In January, Hartmarx, the 122-year-old high-end men's garment company that supplied Barack Obama's inauguration tuxedo, declared bankruptcy. By spring the major secured creditor, Wells Fargo, was reportedly favoring a buyer who planned to liquidate the company or close multiple factories.
Employees of the Hartmarx factory in the Chicago suburb of Des Plaines, represented by the union Workers United (formerly part of UNITE HERE!), in May voted to occupy the factory if need be.
Hartmarx's closing would have meant the loss of almost 4,000 jobs nationwide. The workers gained the support of politicians, including Rep. Frank, Sen. Charles E. Schumer, D-N.Y., and U.S. Rep. Phil Hare, D-Ill., who for 13 years worked in a Hartmarx plant in the Quad Cities.
Hare and other politicians explicitly said Wells Fargo's receipt of bailout money meant it had a responsibility to keep Hartmarx operating. Illinois State Treasurer Alexi Giannoulias, a supporter of the Republic Windows workers, threatened to pull state business from Wells Fargo if it did not help keep the factory open.
On June 23, Jobs with Justice and multiple labor unions sponsored a national day of action targeting Wells Fargo, with protests or events in about 20 cities, including Boston, Los Angeles, Philadelphia, Chicago, the Quad Cities and Portland, Ore.
The actions also addressed Wells Fargo's mortgage-lending practices, highlighting a federal lawsuit filed by Baltimore last year alleging the company aggressively steered African American buyers toward subprime loans. A bank loan officer testified that his colleagues used racist language, including "mud people" and "ghetto loans."
On June 29, Hartmarx announced a sale had been worked out that is keeping the factories open. Politicians, labor leaders and workers celebrated the outcome as a major victory and attributed it to the intensive public campaign.
Johann and her co-workers say the July 9 action is just the start of doing what it takes to keep their factory open, and they hope they will soon be having a victory celebration of their own.