Republic Windows

Shady Republic Windows CEO Arrested

Angela Caputo — Thu, 10 Sep 2009 14:03:56 -0700

We already knew Richard Gillman was a shady operator. We watched as the then-CEO of Republic Windows and Doors abruptly closed his Chicago factory last December, stiffing 250 employees on their paychecks, vacation time, and benefits -- just in time for the holidays. We then learned that Gillman had taken much of the Republic Windows equipment to Iowa and started a new company in an apparent effort to avoid paying union-negotiated wages. The new plant operated for only two months before Gillman shut it down as well, defaulting on a $1 million mortgage.

Now, eight months later, the Cook County state's attorney's office says Gillman broke the law when he moved the Republic Windows equipment across state lines. They arrested him yesterday.

In a bond hearing this morning, prosecutors testified that Gillman, along with other company officials, absconded with 10 semi-trailers full of equipment and conspired to launder company money through shell corporations to avoid paying out its creditors, which include JP Morgan Chase, Bank of America, and General Electric. The charges against Gillman include mail fraud, money laundering, organizing and continuing a financial crime enterprise, and felony theft charges. In turn, Judge Peggy Chiampas set Gillman's bail at a staggering $10 million.

United Electrical Workers Local 1110, which fought for months to help the Republic Windows workers recoup their wages and benefits, responded to the news today. From a release:

Corruption and abuse of workers rights is rampant in corporate America. Very often where you see violations of workers rights there are other corporate crimes and poor conditions as well. Republic Windows and Doors is just one example of something that happens routinely to working people. UE members at Republic Windows and Doors organized and fought back against abuse and won.

We hope to see justice served in this case, but we know that many other workers suffer and deserve justice as well. In part that can come about labor law reform that would ensure, for the first time, penalties for violations of labor law and by aggressively holding corporations accountable when they violate our rights.

"We feel like justice has finally come and we all hope that this is the beginning of more bosses being held accountable for their crimes against workers", said Melvin Maclin, Vice-President of UE Local 1110 and a former Republic Windows and Doors worker.

Two unnamed co-conspirators who allegedly participated in the scheme are also under investigation. This afternoon, Cook County State’s Attorney Anita Alvarez and Chicago Police Supt. Jody Weis are holding a press conference to discuss the case. Stay tuned.

Illinois' Green Job Boom Moves Closer

Angela Caputo — Tue, 28 Jul 2009 15:16:29 -0700

There were some low points along the road, but last year's workers' rights battle at Republic Windows and Doors ended on a euphoric note when the factory's workers won back their withheld wages and vacation time. The good feelings didn't end there, though. When California-based Serious Materials swept in to take over the Chicago plant, the company won widespread praise -- including from the White House -- for having, in Joe Biden's words, the "science, technology and innovation to turn a failed factory into a potentially thriving business." Their goal was to retrofit the plant for green manufacturing just as billions in federal stimulus dollars were earmarked for weatherizing American homes.

With the right conditions, Serious hoped to see their factory at full capacity by the end of June and vowed to give the 250 former Republic Windows workers first crack at the jobs. But Chicago-based journalist Kari Leydersen recently checked back with the company and found that progress at Serious has been moving slowly. So far, a mere 15 former Republic employees have been put back to work. Lydersen explains the delay:

The idea was that stimulus funds for weatherization would exponentially increase demand for Serious Materials’ energy-efficient windows and ecological drywall.

The concept certainly makes sense. But the relatively slow ramp-up of production at the Serious Materials Goose Island plant shows how “green jobs” and, more generally, jobs created by the stimulus, don’t materialize as quickly and easily as people might have hoped.

A major hitch in getting the federal money out the door (including upwards of $400 million for energy efficiency projects in Illinois) is procedural. To meet the terms of the Davis-Bacon Act, the U.S. Department of Labor is still working (PDF) to determine the prevailing wage for this new class of weatherization jobs.

"That federal money just hasn't started to roll out yet," the Sierra Club's Jack Darin tells us. By fall, however, those funds should start flowing.

Meanwhile, Illinois' recently-passed $29 billion capital bill is expected to deliver its own jolt to the state's green economy, which could mean a boost for Serious.

Earlier this month, the Center for Neighborhood Technology broke down (PDF) some of the investments on tap. That Gov. Pat Quinn's decided yesterday to sign the Green Buildings Act (HB 1013) into law this week will only strengthen standards on this spending:

-$2.2 billion to build, renovate, and green state facilities
-$1.7 billion to build schools that meet LEED Silver certification
-$50 million for school energy efficiency grants
-$425 million for Urban Weatherization

The Illinois Capital Development Board will also oversee upwards of $450 million in additional spending on university and other public building projects. "[H]aving a second stimulus from the state should give workers confidence that [the jobs] are coming," Darin tells us. "The better news is that they're more sustainable and will last longer."

Hartmarx And Wells Fargo: The Makings Of The Next Republic Windows?

Adam Doster — Mon, 04 May 2009 07:39:30 -0700

Last December, financial giant and multi-billion-dollar bailout recipient Bank of America canceled a $5 million line of credit to Chicago-based Republic Windows and Doors, leading the owners to abruptly shut down their Goose Island plant. The 250 unionized workers employed at the factory then pushed back, staging a sit-in at the factory to secure the 60 days severance and unused vacation days they were lawfully owed. After a dramatic victory that drew national media attention, some labor experts and business leaders guessed that the peaceful occupation might set an example for banks and employers considering such short-sighted actions.

Apparently, fellow bailout recipient Wells Fargo ignored the uproar, as a similar situation may be brewing around a manufacturer they finance. If the bank ultimately puts short-term profits over the survival of this longstanding Illinois-based company, union workers and Americans at large would have yet another reason to castigate the Wall Street interests who, in Sen. Dick Durbin's words, "own" Washington.

Hart Schaffner Marx (known colloquially as Hartmarx) has been manufacturing high-quality clothing apparel for over 100 years. With 2,000 North American employees -- including 1,000 workers at plants in Des Plaines and Rock Island and a warehouse in Michigan City, IN -- it's the only remaining major, high-end, men's clothing manufacturer in America.

The company has friends and fans in the nation's capitol. Rep. Phil Hare -- as the Washington Post's Harold Meyerson noted last Thursday -- worked in the factory's cutting room from 1969 through 1982 and led the union local for 12 of those years. Meanwhile, President Obama consistently wears Hartmarx suits (see him showing off the label in the photo above), including on the day of his inauguration.

But like most manufacturers of luxury goods, 2008 was a particularily tough year. As demand for discretionary apparel purchases shrunk, profits fell. Coupled with the larger problems on Wall Street, the company's stock price dipped from $2 to $0.20 between late September and late November. And that's when Wells Fargo -- the company's principal lender of short and long term debt -- got active. The bank refused to extend credit to Hartmarx, lowering its borrowing capacity and forcing it to file for Chapter 11 bankruptcy in January.

After Hartmarx declared bankruptcy, it took pressure from Rep. Hare, House Financial Services Committee Chairman Barney Frank, Sen. Chuck Schumer, and members of the Obama administration to convince Wells Fargo to provide the ailing company with a $100 million "debtor in possession" loan to finance operations during the restructuring.

Sources told Women’s Wear Daily recently (subscription required) that Hartmarx is at "a critical juncture in its ability to fund operations," with finances beyond the delivery of last week’s payroll in question. Liquidation -- which would entail selling the company's inventory, machines, and brand name, while firing the entire workforce -- is a real possibility. Hare has suggested it is also the preferred option of Wells Fargo, which accepted $25 billion in TARP funds and recently posted a "record first quarter profit." Indeed, UNITE-HERE general president Bruce Raynor told WWD that the bank has been further tightening the screws:

“As I understand it, these bankers are squeezing the company in an irresponsible fashion,” said Raynor. “They keep tightening the rope and what that does is choke the company gradually.”

Hartmarx employees are justifiably angry over Wells Fargo's actions. Ruby Sims -- a 32-year veteran of the Des Plaines plant -- put three kids through college by making suits. Now she might soon find herself on the unemployment rolls. "I can't believe that a bank that got some of this money would turn around and do us like this," Sims told the Sun-Times Mark Brown. "We deserve a second chance." Hare describes himself as "furious" with Wells Fargo, as the Sun-Times reported:

“The banks were to use this money to accelerate loans to businesses so (the businesses) could keep functioning, to lend money to homeowners and to help companies like Hartmarx that are going through bad times,” Hare said.

Hare went further in his comments to WWD:

"I will not continue to send money to banks that run people out of their homes and businesses. I’m livid with Wells Fargo. I don’t know what their logic is.”

Three bidders -- London-based Emerisque, New York-based Mistral Equity Partners, and California-based Yucaipa Cos. -- are vying to acquire Hartmarx in a bankruptcy court auction. Company executives favor the Emerisque bid because the London firm is expected to keep Hartmarx largely intact and try to revitalize its brands. Yucaipa -- run by billionaire and Bill Clinton buddy Ron Burkle -- has a history of leveraged buyouts of grocery store chains and has maintained solid relationships with organized labor, including the United Food and Commercial Workers.

But despite the potential viability of the company (with its storied history and strong brand), the lenders don't appear to have its long-term interests in mind, as the Sun-Times' Sandra Gray wrote last week:

[S]ources said "a great battle is going on" among Hartmarx's lenders and secured and unsecured creditors about which bidder could accomplish a quick return. One source speculated that at least one bidder might liquidate Hartmarx.

The next step before the official bankruptcy court auction is for Wells Fargo to select the bidder it favors -- a decision that could come in the next few days. If Emerisque is chosen, expect a sigh of relief from those working to save the company. If not, worries about a potential liquidation are sure to rise. We'll be tracking the developments.

Image used under a Creative Commons license by Flickr user The Official White House Photostream.

UPDATE: Greg Hinz has more:

[Workers United Chicago area treasurer Joe] Costigan strongly hints that, like the Republic workers, the Hartmarx folks may decline to leave the premises if someone tries to shut it.

"We're not going to rule anything like that out," he says. "We are not going to tolerate job destruction."

Full disclosure: Workers United, which presents the Hartmarx workers, is an affiliate of the Service Employees International Union. The SEIU Illinois State Council sponsors this website.

Daley Stands With The Republic Workers ... Five Months Later

Josh Kalven — Thu, 30 Apr 2009 15:17:04 -0700

Somehow we failed to notice that Mayor Daley was there on Monday during Vice President Joe Biden's visit to the former Republic Windows factory (which Serious Materials since reopened). Watch his remarks:

This is a great occasion to drop down the memory hole and refresh everyone's memory on a few things. First, Daley didn't say a word when the Republic Windows workers began their sit-in last December, only chiming in six days later when a deal had been reached to pay the fired laborers the severance and back-pay they were owed. Second, it was Daley who created the tax increment financing (TIF) district that funneled $10 million in taxpayer dollars to Republic between 1996 and 2000, only to see the company's owners take advantage of the loosely-termed agreement and move their business to Iowa.

The company's attempt to skip town -- and short-change its workers in the process -- perfectly illuminated the lack of accountability when it comes to the mayor's "private piggy bank."

Just saying ...

Biden Gets Serious

Angela Caputo — Mon, 27 Apr 2009 15:45:50 -0700

On his swing through Chicago today, Vice President Joe Biden credited the owners of Serious Materials for providing "a story about how we inspire a better tomorrow" through their decision to reopen the former Republic Windows and Doors plant. For evidence that the Goose Island factory is coming back to life, look no further than the dozen former Republic employees who are back on the job. Addressing CEO Kevin Surac during his remarks at the plant this morning, Biden explained why the country needs more businesses like Serious to rebuild the economy:

BIDEN: It's not merely that you have the science, technology and innovation to turn a failed factory into a potentially thriving business that can lead this county ... You've done something that is a little unusual. You recognized, as Sen. Durbin said, that the greatest asset that this factory had was the men and women, the workers that just spoke. And instead of doing what has too often been the case in the last 10 to 15 years, you reached out to the most qualified workers in the the world. Instead of saying 'If you want to come back, I'm going to break your union,' you said 'Come back, union and all.' That's a big deal.

As more orders for energy efficient windows start rolling in -- and the owners are confident they will, thanks to the $8 billion in stimulus funds committed to weatherization and retrofitting -- Serious has pledged to rehire each of the 250 employees who were abruptly thrown out of a job when Republic shut it doors back in December. Furthermore, Serious hopes to eventually grow its Chicago-based workforce to 600.

And there's more to come, according to a White House release:

As part of the rehiring process, the company plans to provide special training for workers on the manufacturing of these energy-efficient materials. Serious Materials believes the reopening of the factory could eventually help put 2,000 people to work, with 600 workers on the factory floor and nearly double that number at work installing the energy-efficient windows at job sites.

As we've said before, the respective business philosophies driving Republic Windows and Serious Materials provide a stark contrast. As Republic bailed on its longtime workforce to open a cheaper, non-union shop in Iowa, Serious saw opportunity in hiring skilled, union-wage workers to create a quality product that is in increasing demand.

In the end, the Republic owners' Iowa venture failed. Meanwhile, Serious is on the upswing.

Via CLTV, here is some video of Biden touring the factory along with Carl Rosen, President of the Western Region of the United Electrical Workers Union (UE) and Local 1110 President Armando Robles, among others:

Image courtesy of Flickr user ueunion.

NLRB: Republic Windows Owners Violated Federal Law

Adam Doster — Sat, 28 Mar 2009 13:21:22 -0700

When 250 members of United Electrical Workers Local 1110 staged a dramatic sit-in at the shuttered Republic Windows and Doors factory late last year, union advocates asserted that the owners violated federal labor law by not giving their workers 60 days compensation and any unused vacation, as required under the federal WARN (Worker Adjustment and Retraining Notification) Act. Turns out, the unionists were right.

According to the Chi Town Daily News, the National Labor Relations Board's regional director ruled yesterday that the decision by Republic Windows owner Richard Gillman to relocate his company to Iowa -- thus avoiding its collective bargaining obligations with the UE -- was illegal. As punishment, the federal agency will seek to fine Republic an amount equalling two weeks of pay for roughly 200 members of Local 1110 who lost their jobs when the plant unexpectedly closed.

But garnishing the penalty won't necessarily be easy, as reporter Fernando Diaz explains:

The issue is complicated by the fact that Republic is operating under the protection of the U.S. Bankruptcy Court.

Because of that, the NLRB will seek to negotiate with Republic rather than levying a fine, says Terry Morgan, a deputy assistant general counsel with the agency. Absent an agreement, the agency would have to get in line behind other creditors, which would likely diminish the amount Republic pays.

Morgan also tells Diaz that if no settlement can be reached, an administrative judge could impose stiffer penalties, including seizing Gillman's assets. Whatever is left of them, that is.

Maddow On Republic Windows, Blago

Progress Illinois — Thu, 26 Mar 2009 07:47:39 -0700

Last night, MSNBC's Rachel Maddow touched on both the Republic Windows legacy and Rod Blagojevich's radio hosting stint in her "Ms. Information" segment. Watch it:

Meet The New Boss (Not The Same As The Old Boss)

Josh Kalven — Tue, 24 Mar 2009 14:51:10 -0700

Yesterday, Serious Materials Vice Chairman Paul Holland spoke at the White House as part of an event focusing on clean energy. Serious, as you may remember, is the California-based company that recently purchased the former Republic Windows factory on Chicago's Goose Island and agreed to gradually rehire the 250 workers who were so abruptly laid-off last December. But the former Republic employees aren't the only ones singing Serious' praises. As Holland himself explained, the company -- which manufactures energy efficient windows and green building materials -- last week re-opened a shuttered windows factory in Vandergrift, PA. Watch his remarks:

I'd take this guy over Richard Gillman any day of the week.

(H/T Lynn Sweet)

UPDATE (7:56 pm): Holland also got a shout-out during President Obama's opening remarks at tonight's primetime press conference: "Yesterday, I met with a man whose company is reopening a factory outside of Pittsburgh that's rehiring workers to build some of the most energy efficient windows in the world."

Gillman In More Trouble

Josh Kalven — Thu, 12 Mar 2009 12:45:48 -0700

The Chi-Town Daily News reports on yet more evidence that former Republic Windows owner Richard Gillman is not a very trustworthy businessman.

While the abrupt closure of their factory last December caused quite an ordeal for the Republic workers, it seems pretty clear at this point that they'll be much better off working for Serious Materials (which recently bought the shuttered Chicago plant) than Gillman.

Biden And Durbin Give "Serious" Props

Angela Caputo — Mon, 02 Mar 2009 10:08:50 -0800

Add Vice President Joe Biden and Sen. Dick Durbin to the list of officials heralding Serious Materials for its efforts to revive the former Republic Windows factory.

In separate statements released last night, both Biden and Durbin applauded Serious’ ingenious plan to scoop up the troubled company with some help from the economic recovery package and reshape the focus of the plant, creating 250 “green-collar” jobs in the process. As we noted last week, the California-based company will soon put the former Republic employees back to work manufacturing energy-efficient windows. These types of windows are now in high demand thanks to the $16 billion worth of stimulus funding for retrofitting and weatherization projects. First, from Biden:

“The reopening of this factory and the rehiring of these workers provide an excellent example of how the money in the Recovery Act is targeted to spur job creation quickly,” said Vice President Biden. “These workers will not only earn a paycheck again; they will go back to work creating products that will benefit America’s long-term economic future.”

We watched Durbin walk the factory floor back in December, personally lending support to the workers as they staged a six-day sit-in to take back their wages and dignity. At the time, Durbin cited their struggle as a national symbol of how corporate greed negatively impacts American workers. He also chided Bank of America for refusing to extend enough credit to cover the laid-off workers’ back-pay, despite receiving billions in federal bailout money.

Fast forward two months and Illinois’ senior senator is now pointing to the small factory on the North Side -- and its new owners -- as a shining example of how the private sector and the government can successfully partner to reshape the economy. From a statement:

“When Republic shut its doors in December, the jobs Illinois lost were not only good paying jobs, they were good for the environment too,” said Senator Durbin. “Those are the very jobs we need to preserve in order to put our economy back on track. The economic recovery package has recreated a market for energy efficient materials that virtually disappeared as our economic crisis deepened. With $16 billion available for weatherization programs, companies like Republic will be able to reopen their doors and put people back to work.”

While Serious certainly deserves kudos, the strength of the Republic workers and the support of their union, UE Local 1110, must be recognized as well. Had they not stood shoulder to shoulder late last year, the Serious owners would never have caught wind of the opportunity and the factory could still be sitting idle.