A spontaneous sit-in by workers at Chicago's Republic Windows and Doors came about when little people refused to accept abuse while America's financial institutions were bailed out. The small settlement of under $2 million would give about $7,000 due in compensation to each person, a resolution emblematic of the 2008 US transition.
The Chicago manufacturer Republic Windows and Doors gave its 250 employees a three-day notice that it was closing on Friday, December 5 in the 2008 US transition year. The law calls for 60 days notice. In a statement released through Market Watch on December 8, the company stated that its earnings had dropped from over $52 million in 2007 to just over $40 million in 2008.
The company also disclosed that it had begun negotiations with its lender, Bank of America, in mid-October for an orderly closure by January since the Bank had refused to extend the manufacturer's credit line on the grounds that it was over-collateralized on an approximate $2 million loan. The Bank rejected the plan Republic resubmitted in mid-October and also called for a shorter wind-down of operations. A new plan submitted in late October was also rejected by Bank of America in late November, along with a request to pay vacation salaries to employees earning about $14 an hour.
According to ChiTown Daily News on December 8, the owners of Republic purchased an Iowa plant making the same product just two weeks before the planned December 5 closure of the Chicago plant. The new plant, Echo, was formerly operated by a Pennsylvania plant. Republic's owners had purchased a $2.6 million condo in the new location in 2007.
The workers occupying the plant throughout the week-end gained mounting public support, first locally, then nationally and then worldwide. They became the symbol of the situation throughout the country.
In the 2008 transition from a Republican to a historic new Democratic administration, financial institutions were being bailed out with $700 billions of taxpayer money. Earlier in the year, as disclosed by Bloomberg News in December on being denied a freedom of information request pursued since April, the Federal Reserve had disbursed $2 trillion in emergency loans to recipients who could not be named due to the -unprecedented crisis- in which loss of confidence could have -devastating effects.-
All that went on as more than a half million taxpayers lost jobs in the month of November alone. In December, the total of Americans falling into unemployment in the last three months was well over a million.
Back in Chicago, Bank of America had become the city's second biggest bank after buying out LaSalle Bank in October 2007, which had been the Chicago area's second biggest deposit gatherer behind Chase, according to the Chicago Tribune in late November. Deposits since the acquisition had declined by over 7 per cent as of June 2008, the latest figures available from the Federal Deposit Insurance Corp.
No doubt deposits declined further in the souring economy with bailouts making no impact. Bank of America received $15 billion of the $700 billion bailout money and was expected to receive another $10 billion as of early December.
The initial $15 billion bailout of the Bank of America was the equivalent of what automakers were denied in early December. On December 5, shareholders approved of the Bank's purchase of Merrill-Lynch, which may have received a $10 billion infusion from the bailout. According to the Bank's chairman, the transaction would make the Bank the -premier financial services franchise- for everything from financial services to credit cards. The transaction would also increase the Bank's -global footprint.-
On Monday, December 8, the Illinois Governor called for a halt to state business with Bank of America until it restored the line of credit enabling Republic Windows and Doors to pay vacation and severance amounts due to Republic's 250 workers. On Tuesday at 6 a.m., the Governor and his Chief of Staff were arrested on -unrelated charges.-
Meanwhile, Reuters announced in early December that the credit-card industry was expected to cut $2 trillion in consumer credit over the next 18 months. Consumer liquidity was expected to drop by 45 percent as the three biggest banks, including Chase, insulated themselves against a tsunami of expected consumer default. They would do that by closing accounts, cutting credit lines and raising interest rates, measures taken without prior notice as stipulated in fine print on credit card contracts extending protections in one direction.
Appropriately enough, the urgent need to stimulate consumer confidence expressed during the $700 bailout was gone from the headlines by December. Yet the board of directors and the compensation committee of Merrill Lynch were due to meet on Monday, December 15, prior to the investment firm's acquisition by Bank of America, expected by the end of the year.
The agenda for that meeting was to decide on the amount of bonuses the chief executives were to receive, including a $10 million figure that the head of Merrill Lynch had proposed as appropriate for himself. The public outcry, and a threat by the New York Attorney General, prompted that head and four other executives to forego a bonus for the current year.
Hungarian-born American internationalist writer Helen Fogarassy has worked with the United Nations for nearly 20 years. She is the author of a suspense novel, The Midas Maze, about murderous hijinks in UN/US relations. She is also the author of The Light of a Destiny Dark, a novel about the Euro-American cultural gap through Hungarian eyes, and a nonfiction eyewitness tribute to the UN's work, Mission Improbable: The World Community on a UN Compound in Somalia. All are available on the major web bookstore sites. E-mail her at
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