Bank of America agreed today to extend a line of credit to a Chicago company whose workers have been hunkered down in the factory for five days since it abruptly shut down and they were fired without the 60-days pay or notice federal law requires.
The Chicago Republic Windows & Doors Factory closed when it was unable to receive financing from Bank of America, company officials said.
But today, the bank agreed to give Republic "a limited amount of additional loans" to provide workers with their severance packages and earned benefits, in an attempt to resolve the grievances of the more than 200 angry workers who staged the protest in the factory.
The union workers believed they were victims of a bungled bailout and that Bank of America, which received $25 billion in the federal rescue package, is what stands between them and their paychecks. Workers carried signs outside the factory Monday, attacking the bank, saying: "You get bailout, we get sold out."
"You start thinking about payments, your bills, your mortgage, your rent," said Vicente Rangel, a 34-year-old maintenance technician who was laid off after 15 years working for the company.
Republic's sales of windows sank along with the housing market. But the union quite literally cast the bank as the "rat," blaming it for not extending the company's credit line.
"Frankly, it's shameful that a bank that got $25 billion in bailout money turns around and shuts down a factory by cutting off their credit and then refuses that money be spent on people's rightfully earned benefits," said Leah Fried, a union organizer for United Electrical Workers. "We're going to hold Bank of America accountable for what they are doing here."
In a statement Monday, Bank of America said that, as a lender, it cannot tell the company "how to manage its affairs and what obligations should be paid."
Republic has said the bank displayed "unwillingness" to continue funding the troubled company, which the bank made moves to correct today. The dispute surrounding Republic's laid-off workers is generating sympathy from President-elect Barack Obama.
"When it comes to the situation here in Chicago with the workers who are asking for their benefits and payments they have earned, I think they are absolutely right," Obama said at a news conference Sunday. "If they have earned their benefits and their pay, then these companies need to follow through on those commitments."
Illinois Gov. Calls for Pressure on Bank
Illinois Gov. Rod Blagojevich called Monday for a boycott to pressure the bank to provide credit and lend support to the workers.
"We have contacted all our agencies across state government and, as of now, every agency has been ordered to suspend doing any business with the Bank of America," Blagojevich said Monday. "We hope this kind of leverage and pressure to do the right thing for this business -- take some of the federal tax money that they've received and invest it -- by providing the necessary credit to this company so these workers can keep their jobs."
The dispute is caught up in the tangle of the bailout money, hundreds of billions, handed over to big banks with few strings attached.
"Companies are failing now because they can't get bank lending, despite the fact that the government has handed out so much of the bailout money," said Lynn Lopucki, law professor at UCLA and Harvard. "The Treasury should have extracted from the banks, as a condition of this money, a promise that they were going to lend."
At Bank of America's Chicago offices, officials met Monday to hammer out some kind of deal. Meanwhile, protests spilled over to some of the bank's branches and, back at the factory, workers insisted that the drama would continue until they get the money they say they are owed.