Friday, December 12, 2008

Chicago Workers Vote to End Plant Occupation; BOA Announces 35,000 Layoffs

Chicago Workers End Successful Occupation

Chicago Tribune
December 10, 2008 at 11:32 PM

Jubilant workers gathered outside the Republic Windows & Doors factory

Bursting from the front doors of the factory they had occupied for more than six days, the former workers of Republic Windows & Doors jubilantly chanted "Yes We Did" in victory tonight.

About 9:30 p.m., the more than 200 workers present at the shuttered plant voted unanimously to accept a deal brokered after three days and nearly 20 hours of negotiations between their union, Republic management, its lender, and other parties.

In the end, about $1.75 million was brokered to accommodate the workers' demand for 60 days severance wages, vacation pay and a two-month extension of health insurance.

Workers had argued they were owed the pay after Republic Windows shut down the Goose Island plant last Friday on only three days' notice, rather than the two months' notice required by federal law.

$1.35 million was extended by Bank of America as a loan to Republic management, and $400,000 was contributed by JP Morgan & Chase, Co., who own a 40 percent stake in the company. Workers will receive checks within a week representing two months' pay and unpaid vacation time -- about $6000 per worker, said U.S. Rep. Luis Gutierrez (D-Ill.), who moderated the negotiations.

"The occupation is over," said Armando Robles, president of the union local based at the plant. "We have achieved victory. We said we will not go until we got justice and we have it."

Other Republic workers said they were thrilled that the sit-in had accomplished its goals and brought support from around the world.

"I feel rejuvenated. I feel much, much better," said Melvin Maclin, 54, a Republic employee for 7 years. "It's been a long, hard battle. I just feel so wonderful knowing that myself and all of my co-workers are going to be able to have a Christmas and a better year."

"It was worth it," Heriberto Barriga, 28, an employee of 9 years. "It was not only for us, it was for everybody nationwide, because they can do the same thing."

Negotiations were unable to come up with an immediate solution to re-open the factory, said organizers for the United Electrical, Radio and Machine Workers of America, the workers' union. However, a fund to try and re-open the plant -- called the Windows of Opportunity Fund -- would be started with donations received during the sit-in, they said.

Gutierrez thanked Bank of America and other public officials, including Illinois State Treasurer Alexi Giannoulias and Ald. Manny Flores and Ald. Ricardo Munoz, for participating in the talks.

"It's a new time and a new day when elected officials don't side with people other than the working men and women," Gutierrez said.

--Robert Mitchum
Readers' Comments:

fish on December 10, 2008 11:00 PM
Congratulations to the brave workers who put themselves on the line in this action. Their actions have inspired fellow workers around the world. The struggle continues...

Derek on December 10, 2008 11:09 PM
You guys rock. I really have to take my hay off to you. I just wish you didn't lose your job just before X-mas.

ann on December 11, 2008 12:18 AM
Wow, why is this the first mention of Chase Bank's involvement? Possible "conflict of influence...err.. interest"? Nice omission, there, guys. Laid it all on Bank of America, instead. Yellow journalism is alive and well in Chicago.
I am happy for the workers, sort of. I am sure they would prefer jobs to payouts. Still proud of the best worker's plan around, namely, Union. Stay strong.

Cal on December 11, 2008 10:37 AM
Workers sat down and brought Bank of America to its knees! Congratulations and thanks to our sisters and brothers in this fight. You have reminded the nation what labor militancy looks like, and that courageous action can curb corporate malfeasance.

Republic sit-in ends, workers declare victory!
Reprinted From the People's Weekly World
by John Bachtell

CHICAGO — Workers occupying Republic Windows and Doors declared victory after they unanimously voted to approve a settlement reached after three days of negotiations with the company and Bank of American, its chief creditor.

“The occupation is over,” said Armando Robles, United Electrical, Radio and Machine Workers Local (UE) 1110 president. “We have achieved victory. We said we will not go until we got justice and we have it.” UE represents the 250 production workers at the plant.

The settlement totals $1.75 million and provides workers with eight weeks of pay, two months of continued health coverage and accrued and unused vacation pay. Money from Bank of America and JPMorgan Chase, which owns 40% of the company, will be placed in a separate fund to administer the payments.

"This is about more than just money, said UE Western Region President Carl Rosen. "It's about what can be achieved when workers organize and stand up for justice."

The workers weren’t able to save the plant, which will close. However, UE Director of Organization Bob Kingsley announced the creation of a new foundation dedicated to reopening the plant starting with seed money from the UE national union and the thousands of dollars of donations to UE Local 1110's Solidarity Fund that have come in from across the country and around the world. The fund will be called the “Window of Opportunity Fund.”

The occupation started Dec. 5 when it was shut down after the company’s main financier, Bank of America, refused to extend a line of credit. The occupation became a symbol of workers across the country struggling with the worst economic crisis since the Great Depression and what’s seen as a failure of the federal bailout of banks and financial institutions. The day the occupation started, the U.S. Labor Department said 533,000 more jobs were lost in November.

The action created a storm of outrage because Bank of America recently received a $25 billion bailout package from the federal government, but decided it wouldn’t go to keep manufacturing operations running. When the company skipped a Dec. 5 meeting with the United Electrical Workers’ union (UE) and Bank of America, the workers unanimously voted to stage a sit-in.

“These workers are to this struggle perhaps what Rosa Parks was to social justice 50 years ago,” the Rev. Jesse Jackson said. “This, in many ways, is the beginning of a larger movement for mass action to resist economic violence.”

The action against some of the most powerful economic forces in the nation generated worldwide solidarity and support including from President-elect Barack Obama, who called the workers’ demands “absolutely right.” Food, money and solidarity messages poured in and area unions, religious and community activists demonstrated daily with the workers.

Many solidarity actions were part of the Jobs with Justice Coalition People’s Bailout Now Week of Actions Dec. 7-13. A group of religious leaders in town for a meeting of Interfaith Workers Justice rallied at the plant Dec. 9.

“We’re here to stand with these workers to support them in their struggle for justice,” Rev. Nelson Johnson told the World. Johnson is co-president and board member of Interfaith Worker Justice and vice-president of the Pulpit Forum in Greensboro, N.C.

“People need to work and this is no time for the banks or the company to betray the interests of the American people who made this [bailout] money available for moments precisely like this one that should directly benefit the workers here,” said Johnson.

The company, maker of vinyl windows for the home construction market, had employed 300 workers at the factory, including 250 unionized production workers, for 45 years. The firm started as a family operation but now the Wall Street behemoths Bank of America and JPMorgan Chase, the nation’s largest bank, have controlling interest in the company.

Republic closed the factory with three days notice when Bank of America refused it a $5 million line of credit. As chief investor, BA has effectively controlled the company’s finances. The abrupt closure clearly violated the federal WARN Act, requiring employers to give 60 days notice of a mass layoff (Illinois state law mandates 75 days) or pay the workers and continue their health benefits for that time.

City, county and state officials called for breaking ties with Bank of America if they don’t release funds so the workers could receive what they were owed. They also called for an investigation into what Bank of America is doing with the bailout funds, perhaps investing in overseas operations but not in the United States.

“The government gave $25 billion to BA. They are supposed to work with businesses to keep them open, not shut them down,” Lalo Munoz, 54, told the World. Munoz, a machine operator, had worked at the plant for 34 years.

Others see the banks and corporations as taking advantage of the financial and economic crisis to break unions, shed worker benefits and pensions. UE spokespersons say Republic, which received millions of dollars in city subsidies, bought a similar plant in Iowa. Speculation is production will be restarted in the non-union Iowa plant. The role of the banks in this decision is not known.

“The workers want Bank of America to keep the plant open and the workers employed,” said UE's Rosen. “There is always a demand for windows and doors. But with Barack Obama’s stimulus proposal, there will be even greater demand for the products made by Republic’s workers. It doesn’t make sense to close this plant when the need is so obvious."

jbachtell @

US bank shares plunge after Dimon warning

By Francesco Guerrera,
Saskia Scholtes and Greg Farrell in New York
December 12 2008 00:26

Jamie Dimon, JPMorgan Chase’s chief executive, prompted a sharp fall in financial shares on Thursday with a warning that his bank was having a tough fourth quarter after a “terrible” November and December.

Hours after Mr Dimon’s comments, Bank of America underscored the problems gripping the sector with the announcement of up to 35,000 job cuts after its planned takeover of Merrill Lynch. BofA said the redundancies, which equate to around 11 per cent of the two companies’ workforce, would take place during the next three years.

Mr Dimon, whose bank has navigated the turmoil better than most rivals, told CNBC that the sharp economic slowdown and rising unemployment were increasing the strains on US consumers and companies.

He said that November and December had been “terrible” months for JPMorgan, contributing to a difficult quarter, adding that the company was prepared to face a similarly tough environment in 2009.

“It’s all going to be unemployment-driven,” he said.

“Unemployment will drive commercial losses, real estate losses, all consumer products’ losses.”

Asked whether he saw any end in sight for the macro-economic troubles afflicting the US, he said: “If we are lucky, we will have two more quarters of this and we will start to see a recovery...It’s possible it’s going to get worse and we’re in for a tougher time.”

Mr Dimon’s warning triggered a bout of selling in banks’ shares with investors focusing on lenders with large exposure to US consumers. JPMorgan ended the day as the worst performer in the Dow Jones Industrial Average, falling 10.7 per cent to $29.94. The shares were trading at about $32 when Mr Dimon began talking.

BofA was also down 10.7 per cent but it recovered some ground in after-hours trading as investors welcomed news of the job cuts.

The redundancies are part of BofA plans to cut $7bn in costs by 2012 and are expected to exact an heavy toll on Merrill’s investment banking unit.

Citigroup fell nearly 9 per cent to $7.57. The falls in JPMorgan, BofA and Citi accounted for nearly a quarter of the 196-point, 2.24 per cent slide in the Dow.

Mr Dimon declined to give a specific answer on whether he would forego his annual bonus but said he had told the board of his intentions and trusted them to do the “right thing”.

As the head of one of the more successful banks this year, Mr Dimon, who earned a bonus of $14.5m and total compensation of $29m last year, could be entitled to a bonus under JPMorgan’s pay-for-performance scheme. However, Wall Street chiefs have been under huge pressure from politicians and unions to give up their bonuses as the country buckles under the weight of the financial crisis.

Copyright The Financial Times Limited 2008

Equal cuts expected at Merrill and BofA

By Greg Farrell, Saskia Scholtes and Francesco Guererra in New York
December 12 2008 00:25

It is normal for an acquiring company to push the brunt of any redundancies on the acquired company, but insiders from both Bank of America and Merrill Lynch expect that the 30,000 to 35,000 layoffs announced yesterday will be almost evenly spread between the two companies.

When the merger was announced three months ago, BofA chief executive Ken Lewis predicted that the bank could wring $7bn in savings from the combination. The bank expects to recognise about 20 per cent of the savings in 2009, and the balance by 2012.

So far, senior management selections at the combined companies have been split between executives from both banks, with Merrill Lynch executives appointed to head departments in which its businesses are stronger, such as capital markets.

BoFA employs some 210,000 people around the world, while 60,000 work for Merrill Lynch, including more than 16,000 financial advisers, known as the “thundering herd”. This group, described by Mr Lewis as Merrill’s “crown jewel”, are likely to be spared any cuts. Indeed, BofA offered financial incentives to more than half of those advisers to stay, while many of those who did not get any special offers are also likely to stay on. But the axe could fall on some of the thousands of employees who serve as support staff for the financial advisers.

At BofA, the most likely area for cuts would be in its securities division, which employs more than 5,000. Merrill Lynch is responsible for some 10 per cent of the trading volume on the New York Stock Exchange, while BofA is a tiny factor in that market.

Merrill’s capital markets groups are also expected to experience heavy cuts, particularly in its fixed income division. Merrill was for years a market leader in structured finance origination, particularly for complex securities known as collateralised debt obligations, and cuts in fixed-income have thus far been light relative to the precipitous drop in origination volume. Merrill’s commercial banking division is also considered weaker than BofA’s.

And BofA’s retail operations, the lifeblood of the bank’s business, are expected to be spared any serious cuts.

BofA, which is in the process of integrating its most recent acquisition, CountryWide, has turned the process of melding different businesses into an area of expertise. The bank announced on Wednesday that Brian Moynihan, who had been overseeing the transition between BofA and Merrill, had been named general counsel at BofA, reporting directly to Mr Lewis. Greg Curl will take over Mr Moynihan’s duties heading up the transition team.

“The investment bank at Bank of America will be most at risk,” said one analyst. “In buying Merrill Lynch, they bought skills, expertise and management. The duplication between the two is almost 100 per cent and Bank of America’s investment bank is the junior partner.”

Another analyst said that Merrill’s investment bank was also likely to be targeted by the cuts. “Bank of America’s appetite for risk-taking is going to be even less than that of Merrill’s management, so we can expect a significant de-risking and de-leveraging of Merrill’s operations.”

Copyright The Financial Times Limited 2008

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