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Credit crunch threatens local plant

The credit crunch — and the failure of big banks to use federal bailout funds to free up credit — could hit a local manufacturer, where workers were told denial of routine credit by Bank of America could force them to close down.

Clergy and community supporters joined workers from Republic Windows and Doors, 1333 N. Hickory, who picketed Bank of America on LaSalle Street yesterday, demanding that bailout money be used to keep Republic’s credit line open.

On Monday morning Republic managers told the plant’s union committee that they would be unable to continue operations unless they could get credit needed to buy materials and make payroll, said Mark Meinster of United Electrical Workers, which represents most of the plant’s 300 workers.

“This is really what the bailout money should be going to,” Meinster said. “If the bailout was to free up the credit market, Republic should be getting financing.”

Bank of America received $15 billion in bailout funds, and a few weeks later invested $7 billion in the China Construction Bank. Federal agencies gave banks $125 billion last month, saying they “expect all banking organizations to fulfill their fundamental role in the economy as intermediaries of credit to businesses, consumers, and other creditworthy borrowers” — but setting no actual requirements, according to the New York Times.

Republic Windows, in existence since 1965 and a longtime Bank of America customer, “is a company that under normal circumstances would be able to continue their operation,” Meinster said.

He said workers were concerned because the company moved some equipment out of the plant last weekend — they were told it was being returned to leasing companies — and managers were removing computers and files.

“They told us everything hinges on financing from Bank of America,” Meinster said. “They said they hope to keep operating but it’s day-to-day.”

He said the union got “no firm commitment” that legal requirements for 60-day notice or 60 days of pay, along with all owed benefits, would be met.

Republic told union officials a meeting with the bank is scheduled for next Tuesday, Meinster said.

 

See also: Re. Republic – more on the ‘credit crunch’

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Category: banks & credit, jobs, labor

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