“To push or thrust out,” those would be the words some 200+ workers would describe as their last act at Chicago-based Republic Windows and Doors when the firm closed its doors for good last Friday, December 4. But then again, would it be the last time? Yesterday’s lead story on CNN, “Illinois Governor Backs Workers Will Halt Business With Lender” suggests otherwise! My Governor has banned the state of Illinois from conducting any business with Bank of America, the company’s lender. The company, Republic Windows and Doors, failed to provide the mandatory 60 days advance notice of the plant closing and for that, Governor Blagojevich felt the need to suspend all state financial dealings with Bank of America. Let me restate this one more time. Republic Windows and Doors, failed to provide 60 days advance notice and back pay therefore, my Governor suspended all financial dealings with Republic’s lender, Bank of America. That makes about as much sense as….
Republic Windows and Doors, formed in 1965, “has seen its business plunge with the housing market. Monthly sales fell to $2.9 million from $4 million,” according to the President of the Company in this Crain’s Chicago article. So far, so what – right? If you are in the construction industry, who hasn’t seen sales slow? But wait, the story gets more interesting. According to a Federal law, a plant must provide 60 days advance notice of a plant closing or mass lay-off. Republic gave three and then Bank of America announced it refused to lend any more money to the troubled firm. The issue at hand – who is responsible for the lack of advance notice – can hardly be blamed on Bank of America! And yet my Governor took it upon himself (did I mention how good of a job Blagojevich does in balancing our own state’s books?) to suspend all state business dealings with the lender. [Note: Aptium Global does not bank with Bank of America]
What has become almost humorous about this story are all of the issues not discussed in the main body texts of the articles such as:
1. Republic’s reputation for slow lead times and horrible customer service
2. The union refused to negotiate any changes in pay or how layoffs could be handled
3. The math in the story doesn’t tell the full picture. Consider this from the Chicago Tribune Chicago Tribune “At the high point of the residential construction market, product sales to home builders totaled $30 million at the company. This year, those sales will total $6 million, said Amy Zimmerman, vice president of sales and marketing. Sales of replacement windows will total $38 million this year, down from $40 million.”
Some of the comments to many of the articles published on this story mentioned that the company could be a going concern. On the other hand, Amy Zimmerman is part of the old management team who recently purchased another window and door plant according to a different Tribune article, “people who apparently have ties to the financially strapped Republic Windows formed a limited liability corporation in Illinois last month, Echo Windows & Doors, that has bought a similar plant in western Iowa.”
I suspect we’ll see many more plant closings very similar to this one. It’s a blow to the metals industry (aluminum extrusions for those of you tracking metal applications). I used to work for somebody a long time ago who made a business out of bankrupting companies and starting new ones. His mentor was Mark Rich. Things that make you wanna go hmmm…..
Postscript: It isn’t typically my style to kick someone while he is down but a bit of good fortune came to the State of Illinois today…our Governor has been convicted. The Chicago Sun-Times has great coverage of the story. His “alleged” wrong-doings read like a fictional movie script. If you have 15 free minutes, you might want to check out the story.