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Credibility crisis at Republic Windows

The resolute action of Republic Windows workers, with the attention they’ve commanded and the widespread support they’ve won, has brought to the fore serious questions of credibility for the company, for Bank of America, and for the federal bank bailout program — questions that would have otherwise been swept under the rug.

Republic owner and CEO Rich Gillman’s claim that the plant closing was primarily caused by the economic downturn is called into serious question by the Chicago Tribune’s report that the Gillman family has opened a new window company, bought a plant in Western Iowa from another window company, and announced the workforce there would be doubled.

Gillman is starting to look like the epitome of a “fly-by-night” operator.

Bank of America’s statement that it has nothing to say about whether workers get what they’re owed is challenged by a new statement from Republic detailing the bank’s rejection of a two-month wind-down of business and of a proposal to issue vacation pay to all employees.

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There is posturing on the part of both the company and the bank — and Republic’s claims of years of losses should be open to question and, hopefully, examination.  (In a 2006 post on a window industry forum, Republic vice president Amy Zimmerman said that business was better than it had ever been in her 15 years with the company.  That was the height of the housing boom.  She also calls reports that the company got TIF money “fiction”; Ben Joravsky has just confirmed the reports.)

United Electrical Workers insists that Bank of America is the party that can ultimately resolve the situation.  (Jobs With Justice has an online campaign targeting BoA.)

It would be a shame to close the state-of-the-art manufacturing facility at a time when a new administration in Washington promises energy conservation initiatives that would create demand for Republic’s energy-efficient products.  (There’s already new demand for their noise-abatement windows out by O’Hare.)

But a quick victory over immediate demands would send a clear signal to workers and unions across the country — to a labor movement which has struggled with its own kind of credibility crisis for years — about the value of fighting back.

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Beyond that, the crisis dramatizes the complete lack of accountability and oversight for the federal bailout of financial institutions.  That deal was sold with the promise that its purpose was to get credit flowing.  But banks were given money with no strings, and they are not meeting their end of the deal.

As UE’s Carl Rosen argues, the root of the nation’s economic woes is the accelerating concentration of wealth at the top, which has starved consumer power — and the bailout is just making it worse.

 It’s the administrators of the bailout who are to blame for that.  Last week the Government Accountability Office issued its first report on the bailout — noting that the Department of Treasury has no way of knowing how government funds are being used by financial institutions.  As ProPublica reports, Treasury rejected GAO’s proposal for tracking the funds.

The New Deal provided banks with backstops to prevent failure — in return for strict regulation, oversight, and transparency.  In recent years the bailouts have gotten bigger, while the oversight has disappeared.  The Wall Street insiders currently running our Treasury are still operating in that mode.

That’s got to change.  And first credit for any improvements will have to go to the Republic workers.

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Category: banks & credit, economy, jobs, labor, TIF

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