Revolt on Goose Island: The Chicago Factory Takeover and What It Says About The Economic Crisis
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Revolt on Goose Island: The Chicago Factory Takeover, and What it Says About The Economic Crisis
INTRODUCTION
Kari Lydersen, a staff writer for the Washington Post, wrote the Revolt on Goose Island: The Chicago Factory Takeover, and What it Says About The Economic Crisis in 2009. This was during a time when the economy was in financial crisis and many lives were being disrupted. It is situated in Chicago, Illinois at the Republic Windows & Doors factory. This story tells how 250 members of the UE, a very progressive union took a stand for what they believed they were owed. The purpose of writing this book was to show that people in the labor force were tired of being taken advantage of and wanted their lives to matter.
THE COMPANY
The Republic Windows & Doors factory was located on what is known as Goose Island in the Chicago River. This was an area that used to be located in the heart of the industrial and commercial businesses. The area had lost most of its industrial businesses and was in a revitalizing mode to turn it back to the industrial roots that had first started that area. Republic Windows & Doors was a small family owned business that made low-cost storm windows and doors (Lydersen, 22). By moving to Goose Island, the city committed almost $10 million in 1996 to help Republic establish the new building and to grow (Lydersen, 25). The money was funded through TIF (tax increment financing) funds that are used to revitalize areas that have declined in value and use. Republics TIF funding came with the stipulation that the factory maintain 549 jobs for at least eight years and make “reasonable commercial efforts” to maintain more than 600 jobs until 2019 (Lydersen, 25). It was at this point that Republic started changing; their product was not of the quality as it had been previously and the company slowed down the amount of business it did with small contractors wanting to sell large quantities to subdivision developers in the Midwest.
BAILOUT
As Republic Windows & Doors was reaching this point, it was entering a financial crisis due to it excessive spending and the acquisitions of foundering companies that were already in deep debt. This was during the early to middle part of 2008 and financial institutions were also facing their own crisis. The major lender for Republic was Bank of America. They too were spending a lot of money in acquisitions of failing financial institutions and had troubled mortgages upward to $40 billion. The government had developed a $700 billion federal bailout program known as TARP or the Troubled Assets Relief Program (Lydersen, 32). This bailout was designed to allow the Treasury department to purchase or insure up to $700 billion of troubled assets such as residential or commercial mortgages or any securities, obligations, or other instruments that were based on or related to those mortgages. Due to the TARP, Bank of America was granted approximately $45 billion in bailout funds. To me, it should be noted that $20 billion of this bailout money was used to asset Bank of America in a takeover of Merrill Lynch. That is not what I would have considered the purpose of the bailout money to be used for since it was not helping anyone with a mortgage. Bank of America had extended lines of credit to Republic upwards in the amount of $6 million to assist them in being able to meet their obligations to customers and employees. By July 2008, Republics financial situation was looking bleak and they had lost about $3.6 million in just six months. Bank of America refused to loan them any more funds and told them that if they did not find another lender soon, they should start winding down their operations and be prepared to sell off the assets and to pay back the bank and any other creditors. The Republic Windows & Doors company ignored this advice and continued to ask for further funding to help run their business. Bank of America cut off all funding and said that this did not have anything to do with the weak housing market but due to a badly run company that was hemorrhaging and would not be able to pay back their current obligations (Lydersen, 30).
EMPLOYEES
Most of the Republic employees had been there for at least 10 years and some had been there for 34 years. Approximately three-quarters of the employees had come to the United States from Mexico, leaving families and homes behind (Lydersen, 17). Many of them had paid “coyotes” thousands of dollars to bring them across the border in hopes of getting jobs earning enough wages to eventually bring their families to the United States. When these immigrants found work at a company like Republic that paid decent wages, provided health benefits and paid leave, their did not give up these jobs easily. The employees had already been affiliated with one union that did not do anything for them. This union, CSJB, was thought to have ties to organized crime and never files any grievances on behalf of the workers. It seemed to constantly align itself with the company. So the employees decided it was time to get rid of that union and decide upon another union that would represent their interest. In November 2004 it voted for the UE (United Electrical, Radio and Machine Workers of America)