The New York Times Dec. 12, 2008
CHICAGO — The word came just after lunch on Dec. 2 in the cafeteria of Republic Windows and Doors. A company official told assembled workers that their plant on this city’s North Side, which had operated for more than four decades, would be closed in just three days.
There was a murmur of shock, then anger, in the drab room lined with snack machines. Some women cried. But a few of the factory’s union leaders had been anticipating this moment. Several weeks before, they had noticed that equipment had disappeared from the plant, and they began tracing it to a nearby rail yard.
And so, in secret, they had been discussing a bold but potentially dangerous plan: occupying the factory if it closed.
By the time their six-day sit-in ended on Wednesday night, the 240 laid-off workers at this previously anonymous 125,000-square-foot plant had become national symbols of worker discontent amid the layoffs sweeping the country. Civil rights workers compared them to Rosa Parks. But all the workers wanted, they said, was what they deserved under the law: 60 days of severance pay and earned vacation time.
And to their surprise, their drastic action worked. Late Wednesday, two major banks agreed to lend the company enough money to give the workers what they asked for.
“In the environment of this economic crisis, we felt we were obligated to fight for our money,” Armando Robles, a maintenance worker and president of Local 1110 of the United Electrical, Radio and Machine Workers of America, which represented the workers, said in Spanish.
The reverberations of the workers’ victory are likely to be felt for months as plants continue to close. Bob Bruno, director of the labor studies program at the University of Illinois at Chicago, predicted organized labor would be emboldened by the workers’ success. “If you combine some palpable street anger with organizational resources in a changing political mood,” he said, “you can begin to see more of these sort of riskier, militant adventures, and they’re more likely to succeed.”
The tale of how this small band of workers came to embody the welter of emotions in the country’s economic downturn is flecked with plot turns from the deepening recession, growing anger over the Wall Street bailout and difficult business calculations. The workers were not aware, for example, that Republic’s owners had quietly set up a new company, Echo Windows LLC, incorporated on Nov. 18, according to records with the Illinois secretary of state’s office. And Echo had bought a window and door manufacturing plant in Red Oak, Iowa.
Company officials in Iowa declined to comment, but Mary Lou Friedman, the human resources manager at Echo, said in a telephone interview that the factory had 102 employees, all nonunion.
And at the last minute of negotiations, according to Representative Luis V. Gutierrez, Democrat of Illinois, who helped moderate talks to resolve the standoff, and union officials, Republic’s chief executive, Richard Gillman, demanded that any new bank loan to help the employees also cover the lease of several of his cars — a 2007 BMW 350xi and a 2002 Mercedes S500 are among those registered to company addresses — as well as eight weeks of his salary, at $225,000 a year.
The demand held up the settlement, which was reached only after Mr. Gillman agreed to back down. (Mr. Gillman said Friday that he had sought the money to offset a large bonus in 2007 that he had chosen not to accept.)
In many ways, however, Republic was an unlikely setting for a worker uprising. Many workers interviewed, including some who had been at the plant for more than three decades, said they considered it a decent place to work. It was a mostly Hispanic work force, with some blacks. Some earned over $40,000 a year, including overtime, pulling them into the middle class and enabling them to set up 401(k) retirement accounts and buy modest homes.
But after Mr. Gillman took over as owner in 2006, there were several rounds of layoffs, and the number of employees fell to about 240, from more than 500.
The company had been affected by the declining housing market, and Mr. Gillman said it had also been affected by Chicago’s higher production costs. He said he had hoped to salvage the business by buying another manufacturer in Ohio, but was turned down by Bank of America.
“This has been the worst week of my life,” he said. “I know many of those workers at Republic personally, and I put 34 years of my life into that business, and all my money, too. No stone was left unturned in our effort to save Republic.”
By mid-October, the company had exhausted its $5 million line of credit with Bank of America, and the bank was refusing to lend the company any more money.
“We declined to provide an additional loan because of the company’s dire financial conditions,” said Julie Westermann, a bank spokeswoman.
Bank officials said Republic filed for bankruptcy on Friday.
In mid-November, during a late-night vigil to see where the missing equipment was going, Mark Meinster, 35, one of the factory’s union organizers, broached the possibility of a sit-in with Mr. Robles, the president of the local, if the plant should be closed.
Mr. Robles, 38, who had worked at the factory for eight years, said he was excited by the idea but also mulled the potential repercussions. “We’d basically be trespassing on private property,” he said. “We might get arrested.”
Nevertheless, Mr. Robles told Mr. Meinster that he believed most workers would participate. In the coming days, the idea would take root among other union leaders.
On Tuesday, Dec. 2, Barry Dubin, the company’s chief operating officer, delivered the final verdict to workers, telling them they would probably not be getting severance pay or be paid for accrued vacation days. Union leaders quickly moved to hash out details of an occupation.
“We knew keeping the windows in the warehouse was a bargaining chip,” said Melvin Maclin, a groove cutter and vice president of the local.
While some workers picketed Bank of America, others began attending to their own financial worries, with many liquidating their 401(k)’s. Others cast worried eyes on their meager savings accounts.
On Friday, union officials met with company officers and learned the workers’ health insurance was being cut off.
Later, with employees gathered in the cafeteria, Mr. Robles asked for a show of hands of how many would be willing to stay at the factory. All hands went up, with shouts of, “Sí, se puede!” — or “Yes, we can!”
“I ain’t got no other choice,” Alexis McCoy, 32, a driver’s assistant, said later. “I have a newborn. I have to take care of my family.”
Local politicians discouraged the police from arresting the workers. Exasperated company officials decided not to press the matter as the news media began arriving in droves.
The workers organized themselves into three shifts and set up committees in charge of cleanup, security and safety. A sign was taped to a cafeteria wall banning alcohol, drugs and smoking.
Negotiations involving the company, Bank of America and union officials began late Monday afternoon at the bank’s offices downtown.
At the root of much of the discussions was the federal law requiring employees to be given 60 days’ notice, or that amount of severance, when plants close.
Bank officials said it was not their responsibility as lenders to ensure that the company made these payments. They said later that they had been discussing closing the plant with the company as far back as July, giving it plenty of time to fulfill its obligations to its workers.
Nevertheless, union officials argued that Bank of America had received billions of taxpayer dollars in the recent federal bailout, meant to free up credit to companies like Republic.
“We never made the argument you have a legal responsibility,” said Mr. Gutierrez, who described bank officials as willing to be helpful almost immediately. “We said, ‘Will you make a corporate responsibility decision?’ ”
Bank of America’s offer to lend the company roughly $1.35 million came on Tuesday, and additional help came from William M. Daley, the brother of Mayor Richard M. Daley of Chicago and the Midwest chairman of JPMorgan Chase, which owned 40 percent of the window company and agreed to lend an additional $400,000.
Mr. Gillman’s demands, however, became a major sticking point. “I’m not going to describe to you the words that were used when those issues were brought up,” Mr. Gutierrez said.
Eventually, the parties agreed that the workers would be the only ones to benefit. They would be paid severance and for vacation, and receive two months’ health coverage. The company owners also agreed to come up with $114,000 to cover the payroll for their last week of work.
When union negotiators returned to the factory on Wednesday evening with the agreement, the workers approved it unanimously. They emerged from the factory chanting, “Yes, we did!”