Republic Windows Owner Jailed, Charges Filed

Richard Gillman, former owner of Republic Windows and Doors in Chicago, is in jail facing a whopping $10 million bail bond after being arrested and charged with fraud, money laundering, felony theft and other crimes.

You'll remember Gillman from when he abruptly shut the doors on Republic and moved his operations to Iowa. However, his displaced workers refused to leave the premises until Gillman finally paid them two months' severance pay.

Turns out that, after moving to Iowa and taking ten truckloads of equipment (felony theft charges) from his Chicago plant with him, Gillman defaulted on the mortgage (fraud charges) to his new site and also screwed creditors out of payment (part of the money-laundering charges).

The guy would've been better off taking all that dough and relocating to Brazil back when the Republic closing story broke.

This is one story where the union was right all along, and consequently a union spokesman was quick to lump every other boss and business owner in America into the same class as Gillman:

"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.

Stand up and be counted, you scumbags. It's off with your heads!

Recovery in Slow Motion at Republic Windows

I somehow bought into what turns out to be a bunch of hype about the reacquisition and reopening of Republic Windows and Doors in an earlier post.

Veep Joe Biden, not one to shy away from spinning tales if not outright lying, even ventured to Chicago to grandstand in front of the Goose Island factory and caw on and on about the great victory of the stimulus plan in resurrecting Republic Windows and Doors. Of course, his grinning mug was then splashed all over the media, promoting and prolonging the hype that the factory would soon be back in operation with all 250 workers back on board.

Turns out that it's true that a California firm, Serious Materials, did indeed buy Republic Windows and Doors (read the story of its closing), and did promise to hire back the laid-off workers to get everything in full swing by May or June.

Those months have passed, and now it's almost August. At last count, about 15 former employees had been rehired while the factory sits mostly idle.

Serious Materials was--and is--gambling on a part of the Obamian stimulus plan that targeted money toward weatherization, which in turn would (Serious hoped/hopes) materialize in orders for green windows and doors from Republic.

Was Serious just being too optimistic? Time will tell, but you can read the full story here.

Meanwhile, I'm kicking myself in the butt for not doing my due diligence when the hype-filled story first appeared. I should've known that, if Joe Biden took credit for something, it was a pile of made-up manure to begin with.

It's Your Money (Debt), But Biden Takes Credit

The story at Chicago's Republic Windows and Doors actually is a good one, a victory for the workers that is all too rare in these days of massive layoffs and job destruction.

However, it sticks in my craw when someone as blatantly disingenuous as our Veep, Joe Biden, manages to take credit for saving the plant. He showed up there on Monday to boast about the admin's stimulus plan.

In fact, funds from the American Recovery and Reinvestment Act (ARRA) are behind the resurrection of the factory. New owner Kevin Surace of Serious Materials eyed $8 billion in ARRA for weatherization and energy efficiency, hoping for a slice of the action, when he purchased Republic this year. Surace now intends to use the plant on Goose Island and another in Pittsburgh to churn out energy-efficient doors and windows and other weatherization products using ARRA bucks.

It's great news for the laid-off employees, who are now returning to work:

"We would have liked to run the factory ourselves, but things don't really work that way in this country," said Vicente Rangel, 35, who worked at the factory for 15 years. Since the factory closing he looked for work with little luck and took classes in computer skills. "There are not too many jobs out there," he said. "I'm a little bit surprised and glad to be back here. The workers stayed united and we were able to do this."

A good story, but Biden should butt out and go study the Constitution for the first time in his life.

Hostage-Taking Trumps Card Check Anyday

As is their wont, the French reject American culture while embracing and perfecting it, in their own inimitable way.

Take the example of unionization. France is widely unionized. You can hardly visit there without the garbage collectors or air traffic controllers or railway operators going on strike for this or that. They all work for publicly operated entities, which are in turn union strangled, oops, I mean controlled. Anyway, a one- or two-day strike makes for a nice little holiday, n'est-ce pas?

Here in the United States, we argue over card check and whether that should be allowed as the preferred option for union organizing.

In France, they don't argue--they take hostages.

The latest example comes from the Molex Inc. plant in Villemur-sur-Tam. Owners are threatening to close the plant and have been negotiating with the union, but the union smells a rat, sensing that Molex wants to shift operations to China.

Hence the logical thing to do is take two executives hostage until the company agrees to leave the equipment and workers all in place.

So far, this sounds like a Gallic version of the Republic Windows and Doors stand-off in Chicago of late last year. There, employees staged a sit-down until they got their severance packages.

In France, we'll just have to wait to see what happens.

Hostages are, however, treated civilly during these stand-offs. Last month, an executive held hostage at 3M was even treated to moules et frites (mussels and fries, a traditional dish) as a snack.

Like I said before, why check cards when you can just hold some hostages until you get what you want?

"Sign here to recognize our union, or we'll keep you hostage until you do" works faster than gathering all those signatures.

Happy Outcome for Laid-Off Republic Workers

Most everyone is familiar with the saga of the workers at Republic Windows and Doors, who at holiday time in late 2008 were laid off with little notice. However, they refused to leave the premises and staged a sit-down until owner Richard Gillman, backed by a loan from Bank of America, paid them all monies owed from vacation and WARN Act 60 days' pay (WARN basically requires a company to give 60 days' advanced warning of mass layoffs or plant closings).

Even with their victory, the workers faced a bleak economy, with scant prospects of getting hired to do what they knew how to do. In stepped a White Knight, however.

This past month California-based Serious Materials bought the Chicago factory and is in the process of reopening it. The new owners have reached an agreement with UE Local 1110 to rehire all former Republic workers at their former rate of pay and allow the union to continue representing them.

Serious will be manufacturing super-insulated windows that are approved under the federal Energy Star program for their efficiency.

Now, this is one happy tale is this world of bad economic news. Christmas came late for these workers. It must feel nice.

Can the NLRB Force a Company to Reopen?

According to employer attorney George Lenard on his blawg, the answer is yes, no, and "it depends," though he does say it's not a very realistic outcome.

The company in question is the now-infamous Republic Windows and Doors, late of Chicago but now reincarnated in a place called Red Oak, Iowa, and renamed Echo Windows.

The difference? No United Electrical, Radio and Machine Workers union in Iowa.

Recall back in December, when Republic abruptly closed down due to a "credit crunch," the employees refused to vacate the premises until the owner of Republic, a man named Richard Gillman, obtained a line of credit to pay the workers all money due them, including eight weeks of pay under the WARN (Worker Adjustment and Retraining Notification) Act.

Sure enough, along with a Chapter 7 bankruptcy filing to cease operations, Gillman provided $1.75 million to settle with the employees.

Case closed, big victory for the union, right?

Not quite, the United Electrical, Radio and Machine Workers union smelled a rat and filed an unfair labor practice complaint with the National Labor Relations Board (NLRB). The filing requested that the machinery that had been ferreted out of the Chicago plant in the dead of the night to Red Oak and the new factory be returned to Chicago, where Republic might be put back in operation under a potential new owner.

Now, here's where it gets tricky. If Gillman did indeed move his operations to another state to bust the union, then previous court cases (cited by Lenard) grant the NLRB the right to order the old factory to be reinstated with the employees and union in tow.

Lenard doesn't give this reopening-of-Republic scenario much chance of playing out, but he concludes that it's not outside the realm of possibility.

With new appointees to the NLRB under Obama surely to be highly pro-labor, I'd say anything is indeed possible.

Warning About WARN for Employers

The WARN Act (Worker Adjustment and Retraining Notification Act) specifies that 60 days' notice must be given in firms with more than 100 full-time employees when large-scale layoffs are going to take place. The act kicks in when 50 employees at one location are laid off within a 30-day period, or when 33 percent of the workfoce is laid off, or when 500 employees are laid off (regardless of the percentage of the workforce).

However--and there are a lot of howevers in WARN--the window extends to 90 days when the layoffs are staggered but reach those same thresholds in combination. ("Caught you trying to cheat!" is the emphasis here.)

Here's another however: WARN defines full-time employees as those who have averaged at least 20 hours per week in six of the past 12 months, or another definition--if the entire workforce averages 4,000 hours per week excluding overtime.

I bring this up for a couple of reasons. One is that the incoming Obama administration has been loud about extending the 60-day notification to 90 days. The other is that just this week one union at Republic Windows and Doors in Chicago (remember the showdown over WARN during that factory shutdown?) filed suit to force the owners to return equipment to the Chicago site that was reportedly relocated before closing.

Now, here's the interesting part: The union alleges that Republic's owners ferreted away the machinery in the middle of the night to a location in Indiana, where they intended to set up new, non-union operations, and then told the workers that the Chicago firm was shutting down because Bank of America wouldn't extend them a line of credit.

If this is true, it brings to light a fascinating new wrinkle and shows that Republic did indeed scheme to avoid WARN.

In the end, to avoid a public relations nightmare, BofA forked over about $1.5 million to Republic, and the workers received 60 days of pay and benefits.

Which brings up the final point: There's no way an employer would want dozens of laid-off workers sitting around the workplace for 60 days while knowing they're getting the axe. It's doubtful they'd do much constructive work, and it's likely that pilferage and sabotage would take place. Pay them 60 days' worth and see them off.

So, if the Obama team manages to up the WARN stakes, many companies will face paying three months of wages and benefits just to downsize in an effort to survive in tough economic times.

Better to gid rid of them now! LOL Just kidding, of course.

Straight Out of Dickens: Labor Strife in China

You might think it was the early phase of the Industrial Revolution in Great Britain if you visited South China these days.

Guangdong Province is the manufacturing heartland of China, and its factories supply a lot of what we Americans find at Wal-Mart and many other retail stores, especially toys.

But things are getting tough in China, by many standards tougher than we have it here in the U.S.

First, under pressure from Wal-Mart and other large-scale buyers, China officially raised the minimum wage, but that didn't stop Wal-Mart from simultaneously demanding lower costs. Profits, at least for the toymakers, sank immediately.

Then came higher fuel costs and now the recession in the U.S., and factory after factory in Guangdong began shutting down; factory hands were let go en masse, many of them migrant workers whose families back home in distant provinces depend on them for monthly cash infusions--and bare survival.

Since the beginning of 2008, some 3,600 toy factories have gone under, leaving hundreds of thousands without work, yet China still publishes an official unemployment rate of 4 percent.

Now, the workers are fighting back--literally. Dongguan, the city where the toy manufacturers are concentrated, has witnessed several episodes of laid-off workers' occupying and trashing the factories after they're closed. Riot police have been called in. Scenes have gotten ugly. Tensions are understandably high, as is anxiety for the future.

But since the owners of the factories often disappear into the hinterlands after closing shop, local authorities are usually powerless to collect back wages, let alone enforce severance packages. In some cases, the government--hoping to keep face--has itself coughed up the workers' earnings.

As it stands, Chinese factory workers toil up to 80 or more hours a week (when times are good) for the princely sum of 770 yuan a month, about $118. Overtime is almost never paid.

In the States, we just witnessed the employee occupation in Chicago of Republic Windows and Doors, which was abruptly shuttered after Bank of America closed its line of credit to the firm.

The laid-off workers demanded 60 days' wages and benefits under the WARN (Worker Adjustment and Retraining Notification) Act since that law requires firms to give 60 days' advance warning of mass layouts (unless there is an unforeseen emergency, a gray area).

Just last night I heard that BofA was going to advance Republic a $1.2-million loan to remunerate the fired employees.

So, the employees won, evidently, but I have one question:

How is Republic going to repay BofA if it's no longer operating the factory?

(I just learned, but I don't know if it's accurate, that the sum is actually $1.75 million and that it will go into a fund with money from both JPMorgan Chase and Bank of America. This would seem to indicate that it's not a loan, but a publilc relations tactic to counter consumer and public ill will toward the banks.)