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What the Republic Victory Means

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On December 5, the day Republic Windows workers occupied their factory, the Department of Labor announced 533,000 jobs lost in November, the largest loss in over 30 years.

The news on unemployment gave national resonance to the window makers' plight. It also meant that for Republic workers, "it was riskier to leave the plant and go into this labor market" than to stay inside and face possible arrest, said Mark Meinster of United Electrical Workers.

It was one of a number of extraordinary factors that strengthened their hand. There was the bank bailout initiated in October, which had generated widespread outrage -- and now had failed to stem cascading job loss. There was the presence of President-elect Obama's transition team, and the national press, in Chicago -- and Obama's remarkable statement of support for the workers' demands on Sunday.

"We never expected this,'' Republic worker Melvin Maclin, vice president of UE Local 1110, commented on the support of major public officials. "We expected to go to jail."

Then there was Governor Blagojevich. The day before his arrest, he appeared at Republic and promised the state would stop doing business with Bank of America, Republic's main creditor, which had cancelled the company's credit and put the kabosh on paying workers what they were owed.

Blagojevich's statement was taken as a threat, but in the chaos of the next day, when he was taken off in handcuffs by the FBI, the state did indeed shut off business with the bank. BoA provides financial services for tollways and other state operations. It was "a big hit" for the bank, Meinster said. And the city and county were considering similar actions.

On the ground, support for the workers swelled. There were daily demonstrations on LaSalle Street. In Little Village, community supporters protested at a BoA branch. The union reported demonstrations at BoA offices in New York, San Francisco, Buffalo, and Florida. Dave Lindorff reported a similar action in Philadelphia.

Jobs With Justice, which held rallies around the country for a "People's Bailout" that week, began talking about a boycott of Bank of America.

On Wednesday, the day negotiations were concluded, there were hundreds on a picketline that stretched two blocks outside BoA's LaSalle Street office. And in Charlotte, N.C., local labor groups picketed the bank's national headquarters and tried to deliver a letter to bank executives. (As in Little Village, they were prevented from entering.)

Victory

Under pressure from many directions, BoA sidestepped its statements claiming no responsibility for compensation due Republic workers and ponied up $1.35 million to meet their demands. JPMorgan Chase, recently revealed to be a 40 percent owner of Republic -- where midwest chairman Bill Daley must have been concerned about political fallout -- came up with another $400,000.

Workers got the eight weeks of pay and health coverage they were entitled to under plant closing laws, as well as the vacation pay they had accrued.

The victory demonstrates the value of militant action by labor in addressing the economic crisis, Meinster said. He notes the rejuvenating effect on the movement -- particularly the outpouring of support from unions that might not have taken this action themselves, at least before the example of Republic workers.

Recalling Rosa Parks, Rev. Jesse Jackson called the factory takeover "the beginning of a larger movement for mass action to resist economic violence." Chi-Town Daily News quoted U.E. regional president Carl Rosen calling the victory "a wakeup call to corporate America that the rules have changed in this country." AP quoted Chicagoland Chamber of Commerce president Jerry Roper saying, "I'd be the first to say to companies that what you saw with workers at Republic will be repeated over and over across the country."

Green Jobs

The union announced the creation of a foundation dedicated to reopening the plant, seeded with thousands of dollars donated to support the workers along with money from the national union. It will probably fund some initial planning efforts, in the hope that federal support may be forthcoming next year in connection with further bailout efforts or from economic stimulus focusing on green jobs.

It may not be an unreasonable hope, given strong support from local congressional leadership -- and given the surge in demand for Republic's energy-efficient windows that an anticipated national energy conservation program would create.

Phil Mattera of Good Jobs First pointed out that in the web of issues raised by the confrontation -- including unemployment and the loss of manufacturing jobs; fairness for workers in plant closings; and accountability for the federal bank bailout -- the issue of green jobs was overlooked in media accounts. (Indeed the connection with the bailout was largely elided in earlier accounts -- presented in photos of picketers' signs but left out of accompanying articles -- before politicians began raising it.)

The union kept raising the issue of green jobs even as it focused on immediate demands for fairness. The issue is now the basis of any hopes of reopening Republic.

"The workers want Bank of America to keep the plant open and the workers employed," Carl Rosen said after the settlement. "With Barack Obama's stimulus proposal, there will be even greater demand for the products made by Republic's workers. It doesn't make sense to close this plant when the need is so obvious."

There is also the question of how labor addresses longterm disinvestment and deindustrialization. Dan Swinney of the Center for Labor and Community Research argues for a proactive role for unions, monitoring their companies for signs of problems and seeking alternatives to shutdowns by working with community groups and public agencies and seeking business allies.

He points to a remarkable parallel: In 1993 Steelworkers Union members at Sharpsville Quality Products, a decades-old foundry in western Pennsylvania, were told (like Republic workers) that their plant was closing in three days. Like Republic workers, they occupied the plant. They occupied it for 42 days, sought out community allies and worked with the regional industrial retention agency (as well as salaried employees) to take over the business. (See chapter five of Swinney's Building a Bridge to the High Road.)

Employee ownership is only one possible alternative (and it doesn't always benefit employees, as the Tribune Company is demonstrating). In the mid-1980s C.L.C.R. worked with U.E. and community groups in an unsuccessful effort to support a local investor's bid to acquire electronics manufacturer Stewart Warner and keep 2,500 jobs in Chicago. Swinney points to a number of models, including large-scale community-labor cooperative enterprises in Canada and Europe. In any case, he says, unions need to be proactive and creative -- and move beyond their focus on wages, benefits and working conditions.

Bailout

In another coincidence, while Republic workers were protesting Bank of America's credit cutoff to Republic, the failure of banks receiving bailout funds to use them for their intended purpose came under new scrutiny in Washington.

When the Treasury Department started handing out funds under the Troubled Assets Relief Program in October, the Federal Reserve and three regulatory agencies issued a statement: "The agencies expect all banking organizations to fulfill their fundamental role in the economy as intermediaries of credit to businesses, consumers, and other creditworthy borrowers."

But as the New York Times pointed out in November, "that admonition wasn't accompanied by any real requirements to lend." Instead, "nervous lenders are demanding that even healthy loans be paid back. Banks and other financial institutions, meanwhile, are reducing exposures to borrowers and doing whatever they can to discourage the assumption of further debt."

While Republic workers occupied the plant, the Government Accountability Office issued its first report on the bailout, noting that Treasury has no way of knowing how bailout funds are being used by financial institutions. That week a congressional oversight panel issued a report with similar conclusions, and the House and Senate passed measures requiring banks receiving bailout money to report on their lending. After first rejecting the G.A.O.'s recommendation that bank regulators track the spending of bailout funds, Treasury subsequently agreed to carry it out.

As Talking Points Memo points out, oversight of the bailout is getting underway two months after the program was initiated -- and after virtually all of the first batch of multiple billions has been allocated. It may be "too little, too late." Under one legislative proposal, we would find out next July whether bailout recipients are extending credit or just acquiring weaker institutions -- and trimming their loan portfolios.

The Project on Government Oversight points out that a similar bailout program in the United Kingdom (instituted at the same time as ours) had far more stringent requirements on financial institutions, including banning executive bonuses and dividend payments until the government is paid back -- and requiring recipients of bailout funds to maintain lending to businesses and consumers at last year's levels.

The day after the Republic settlement, the Sun-Times reported on another local company that, like Republic, went out of business after Bank of America shut off a credit line it had inherited when it acquired LaSalle Bank last year. Senator Durbin and Representative Gutierrez might push regulators to examine what's happened to LaSalle's business customers since the BoA acquisition. More generally, are big banks issuing blanket orders to shut down credit for businesses below a certain threshold -- including businesses that were served by smaller banks that have been acquired, in some cases with bailout money?

Ultimately, as Rosen and Jobs With Justice have argued, the Republic workers dramatized the basic problem of the bailout, which has accelerated the concentration of wealth at the top that is squeezing the living standards and spending power of working families and dragging the economy into deeper crisis.

T.I.F.

Finally, Mayor Daley has said he'll try to recoup T.I.F. money awarded by the city to Republic on the basis of promises of job creation. But he knows that T.I.F. agreements contain projections of job creation or retention figures but no real requirements or clawback provisions.

Jeff McCourt of Good Jobs First-Illinois points out that Chicago and other municipalities successfully opposed efforts to include T.I.F.'s in the Corporate Accountability Act that was passed in 2003, which contained extensive reporting requirements and clawbacks if promises for job creation or retention weren't met.

The Republic saga makes a good case for upgrading T.I.F. accountability, McCourt said. As it is, the public can't even examine the Republic T.I.F. deal without filing a freedom of information request, he said.

He adds that "the people who run Republic apparently had enough funds to buy a similar operation in Iowa" where workers may be paid even less than in Chicago, which he called "disturbingly reminiscent" of the kind of runaway shops that have plagued workers and communities for three decades.

Perhaps we need "some kind of data base of corporate bad actors who would not be considered suitable for government incentives in the future," he said.

(Originally posted at Community Media Workshop's Newstips.)