Workers’ Fights against Banks Gain Momentum

Union workers at two companies facing threats of liquidation and layoffs are following the lead of Chicago workers who in December occupied their factory and decided to take their fight to Bank of America.  In the two new battles, the workers’ adversary is another big bank, Wells Fargo, which like Bank of America received $25 billion in federal bailout money, and which is also cutting off credit to small businesses.

For six days in early December, the nation’s attention focused on 260 workers occupying Republic Windows and Doors.  Their slogan, “You got bailed out, we got sold out,” resonated with many Americans, who saw billions in taxpayer aid going to the same bankers whose recklessness plunged the economy into crisis.  The bailout seems to have done little to reverse the rise in layoffs, foreclosures and other indicators of hardship.

Republic’s owners were far from blameless, but it was BOA’s cutoff of the company’s line of credit that precipitated the plant’s sudden closing.  The members of Local 1110 of the United Electrical, Radio and Machine Workers (UE) voted not to leave the factory until they got the severance pay they were entitled to under federal law, and vacation and health benefits they were owed under their union contract.

Chicago and Illinois politicians flocked to the plant to be with the courageous union members and threatened to end all government business dealings with the bank.  President-elect Obama publicly endorsed the justice of the workers’ cause.  Demonstrations sprang up at BOA branches across the country.  BOA initially denied any responsibility for Republic’s actions and the workers’ fate, but after three days of negative publicity, the bank began negotiating to pay the workers what they were owed.

That settlement ended the occupation, and since then a new company, Serious Materials, has purchased the plant, agreed to a union contract comparable to what workers had before, and have begun recalling union members to their jobs.  Vice President Biden, when he visited the plant on April 27 to celebrate its reopening, praised these developments as “a big deal.”

Congress, which is to say the taxpayers, have loaned $700 billion to the banks at below-market rates through the Troubled Asset Relief Program.  The Federal Reserve has loaned more than $2 trillion of additional public money to banks and non-financial institutions to maintain liquidity.  The public was told last fall that the bailout of the banks was needed to keep credit flowing to businesses, and thus prevent massive job losses.

Since the bailout an average of 665,000 jobs have been disappearing each month.  This in turn drives state and local budgets into crisis and leads to slashing of public services and layoffs of public workers.  The downward spiral that started with foreclosures of unsustainable mortgages has now caused a new wave of foreclosures from unemployment.  Now it’s the people who bought houses they could afford, with fixed-rate mortgages, that are sliding into default.  Sixty percent of mortgage defaults this year are expected to be the result of unemployment, up from 29 percent last year.

Last week another group of UE members — this time in the Illinois-Iowa Quad Cities area — challenged a major U.S. bank — in this case Wells Fargo — to save their plant and their jobs.

Quad City Die Casting is a family-owned manufacturer of metal die cast products that’s operated in Moline, Illinois for 60 years.  Like most small businesses, the company needs credit for day-to-day operations.

The plant was profitable until the full brunt of the economic downturn hit and cut into orders; it is fundamentally healthy and should bounce back as the economy recovers.  Yet Wells Fargo, which received $25 billion in federal bailout funds, has cut off the company’s credit.  As a result, a viable employer is likely to be liquidated.  A plant closing has been announced for July 12, which would put over 100 people out of work.  The plant’s 80 production and maintenance workers are members of UE Local 1174.

“Small businesses need credit to keep going during these tough times.  Wells Fargo got bailed out with billions of taxpayer dollars.  We demand that the bank not sell us out,” said die cast technician and UE local union President Keith Scribner.  The union is demanding that Wells Fargo keep the business going until a new buyer can be found that will continue operating the plant.

“They say the banks are too big to fail, but what about us?  Aren’t our families too important to fail?” asks plant worker Deborah Johann.  A group of Quad City workers visited Wells Fargo’s regional office in Davenport, Iowa last week to request a meeting to discuss keeping their plant.  Bank officials politely refused.  The union plans to continue pressuring the bank to save their plant, and workers describe Wells Fargo — which received $25 billion in TARP money — as a “repeat offender.”

The prior and ongoing offense they refer to is Well Fargo’s role in the possible liquidation of men’s suit manufacturer Hartmarx.  That company — formerly Hart, Schaffner & Marx — has been operating under a Chapter 11 bankruptcy since January, and recently received an offer to buy the company from London-based Emerisque Brands, which says it would keep the company’s U.S. plants operating.  But Wells Fargo has threatened to kill the deal and force Hartmarx into liquidation.

Inspired by the example of the UE members in Chicago, workers at Hartmarx’s Des Plaines, IL and Rochester, NY plants — who are members of Workers United, the garment and textile union — have voted to launch plant occupations of their own if Wells Fargo tries to force their employer out of business.

At a Chicago event in support of the Republic sit-in in December, Rev. Jesse Jackson said, “This may be the beginning of a long struggle of worker resistance, finally.  There’s been too much silence and too many emails, not enough resistance.”  The Republic workers are glad to see that other workers are picking up the banner of resistance that they raised over their plant.  May there be many more.

Al Hart is Editor of UE News.