This diary is primarily a recompilation of research and articles written by Laura Flanders for Grit TV this summer. LAURA FLANDERS is the host of The Laura Flanders Show coming to public television stations later this year. She was the host and founder of GRITtv.org. Follow her on Twitter: @GRITlaura.
This past year, numerous newspaper articles heralded the opening of a brand-new worker-owned cooperative, New Era Windows. In a jobless recovery, the opening of any job creating business is a cause for celebration, but why all the national attention to a new cooperative in Chicago with only 20 employees? The reason lies in the historic struggle that brought New Era into being and what it represents for labor today.
People Power: The Republic Plant Occupation. It was during the big financial meltdown of 2008. As the relentless outsourcing of manufacturing jobs and the financial collapse brought layoffs in the USA to 500,000 a month, people around the country were increasingly aware of how the 1% was ripping off the 99% while the big banks were being bailed out.
Watch GRITtv’s 2009 discussion of worker takeovers with Naomi Klein, Avi Lewis and UE organizer Leah Fried: http://blip.tv/grittv/naomi-klein-and-avi-lewis-why-can-t-we-fire-the-boss-2139852
It was just days after receiving a $25 billion federal bailout, that Bank of America cut off credit to Republic Windows and Doors, a small manufacturing company in Chicago, causing Republic’s management to fire all 250 workers with just three days notice and without paying workers the wages and accrued vacation pay required under federal law.
But instead of simply filing for unemployment insurance, setting up a picket line and filing a law suit for back pay, Republic’s workers and their union, UE Local 1110 (United Electrical Workers), did the unthinkable. They took over and occupied the plant and stayed, winning the hearts of downcast Americans everywhere. Of course there had been factory takeovers in other countries –progressives often recall with longing the factory takeovers in Argentina in the 1990s- but not since the 1930s had the US labor movement embraced sit-ins.
The workers’ action drew extensive media coverage and attracted wide support. Protest demonstrations at Bank of America branches took place in dozens of U.S. cities during the sit-in forcing U.S. President-elect Barack Obama to express support for the workers, and Illinois Governor Rod Blagojevich to ban state business with Bank of America because the bank’s cancellation of the company’s line of credit had prompted the shutdown.
On December 10, the union members voted to end the occupation after Republic, Bank of America, JP Morgan Chase, and the union negotiated a settlement of $1.75 million used to pay each worker eight weeks wages, plus all accumulated vacation pay, and give the workers more time to find a buyer for their company.
In the next five years, the company was owned by two different employers who also decamped when they felt they couldn’t make sufficient profit. The second time, when workers heard that once again the plant was to close with no notice and no severance, allies from the earlier struggle, started arriving immediately. Former Republic employees, Occupy Chicago, ARISE, the Chicago Worker’s Collaborative, Jobs with Justice and Stand Up Chicago showed up with pizzas and tents and created a supportive environment as workers negotiated with police; a live stream fed video to the world from the start. As Fried, one of the New Era workers noted, “In the last few years, there’s been a real shift in our movements towards direct-action tactics.”
Once again, the company, this time Serious Energy, backed down, announcing a ninety-day stay. By occupying a second time (in February 2012), workers won a chance to form a cooperative and make a bid on equipment But the struggle was (and still is) not over. Last year Serious Energy reneged on its agreement the New Era team had to go through a petition fight for several months even to be allowed to bid on the factory.
With encouragement from their union, the United Electrical, Radio & Machine Workers of America (UE), and The Working World, a progressive investment group that helps cooperative start-ups internationally, the remaining 20 workers formed a company, “New Era Windows LLC.” New Era,100 percent owned and managed by workers, finally opened for business this May.
Where’s the Money. “There have been times that we weren’t sure that we were going to be able to get New Era off the ground,” recalled Macklin. “You need investors. Well, we didn’t have a lot of people knocking on the door to give us money.” Through The Working World, an international cooperative funding institution, the workers from New Republic (aka New Era Windows)were able to raise over $650,000 in credit. After that came contract negotiations and a move to a cheaper new location. To save on expensive moving costs, workers shifted the equipment from their old plant, themselves, in 80 tractor trailer loads.
“We have to remember, it still has a long way to go,” says The Working World’s Brendan Martin. “But the only way the company has been able to get launched in less than a year,” he says, “is because of the potential unleashed in the process of launching a cooperative. If this were looked at by normal investment institutions, they’d have assumed it would cost $2-5 million to open a business like this. It’s been less than a million and the only reason for that is because that other $2-3 million of value has been brought by the workers.”
The new Union-Cooperative Hybrid. The involvement of the United Electrical Workers is also an important factor in the potential success of the new cooperative. For most of the last century, industrial unions viewed autonomous worker coops as a threat to union organizing. This is not, however, the first time cooperatives have played a leading role in labor struggles. The worker-owner model has been used whenever there is an economic downturn as a backup and was a main tenet in the Knights of Columbus in the 1890s. For the first time in recent years, however, we also see traditional labor unions, spearheaded by the Steelworkers joint venture with the Mondragon Cooperative in Spain and CWU and SEIU establishing cooperatives as part of their union organizing.
New Era Windows is fortunate to have the Electrical, Radio and Machine Workers of America (UE) representing them. UE was one of the first unions to be chartered by the Congress of Industrial Organizations (CIO) and was founded in March 1936 by several independent industrial unions.
In 1937 a group of local unions in the machine shop industry, left the International Association of Machinists (IAM), objecting to that union’s policies of racial discrimination, and joined the young UE. UE withdrew from affiliation with the CIO in 1949 over differences related to the developing Cold War and anticommunism. Of the 11 “left” unions that were expelled or resigned from the CIO in 1949-50, only UE and the International Longshore and Warehouse Union remain in existence today
Today UE is regarded as one of the most democratic and politically progressive national unions in the United States, and its philosophy and principle of democratic unionism is summed up in its longstanding slogan, “The members run this union.” Since UE’s founding, its constitution has limited the pay of its officers to “a salary not to exceed the highest weekly wage paid in the industry.
The Importance of an International Perspective. UE also has a long tradition of internationalism, which is of strategic importance in an ever increasing global economy. Over the past two decades the union has built a strategic alliance with the Authentic Labor Front, an independent Mexican union, and is broadly active in international labor outreach and solidarity. Thousands of small cooperatives are popping up all over the world, with similar characteristics and similar problems to New Era and are influencing and influenced by cooperative projects in this country. When immigrants who have experience in cooperatives in their countries of origin, come to the US, their experience informs our struggles here.
In early 2009, Fried and Republic worker Armando Robles, president of UE Local 1110, set out on a national speaking tour. As Laura Flanders noted after her interview with Robles, “At that time, workers were occupying plants in Ireland, England and France. Militant tactics were in evidence all across Europe, as they had been for years in the global South. Lewis and Klein’s film, The Take, documents the Argentinean response to factory closures—not just occupations but, in some cases, worker-ownership of the plants.”
Gar Alperovitz, long time cooperative and union activist sums it up in “A new era for worker ownership“:
“The workers of the just-formed New Era Windows cooperative in Chicago—the same workers who sat in and forced Serious Energy to back down on a hasty shutdown of their Goose Island plant a few months ago, and famously occupied the same factory for six days in December 2008—not only are putting together a bold plan for worker ownership, they are likely to move the entire subject into national attention, thereby spurring others to follow on.”
Though the workers of New Era have a powerful start, if the past is any guide, they will need all the help they can get—financial as well as political. Alperovitz speaks from experience. He was one of the architects of an attempt to establish a worker-owned steel mill in Youngstown, Ohio in the late 1970s—a plan that began with powerful intentions, the financial support of the Carter administration, and the backing of religious and political leaders in the state of Ohio and nationally. The plan was on-track, including a promised $100 million in loan guarantees from the Carter Administration—until, somehow, those opposed to the plan sidetracked the effort, with the promised
money disappearing conveniently just after the fall 1978 elections had passed.
If there is one lesson from the early days of worker ownership attempts it is that building a powerful local and national support group of public figures, nonprofit organizations, national labor and religious leaders and others can be of great and unexpected importance. It can help keep the story alive at critical times, and also help create and sustain a market. (Churches, for instance, buy a lot of windows, as do many other nonprofit organizations.) As the workers in Chicago deal with the myriad of tasks involved in raising money, negotiating with their former employer, Serious Energy, to purchase the factory’s equipment, and restarting production (not to mention learning how to democratically manage their own workplace!), building local and national alliances to support their work is a critical task that can be taken on by allies.
“The Chicago workers have a much, much greater chance of success. They have the skills they need to run a manufacturing business. They have a good market—an energy efficient window is a good friend in a Chicago winter, after all—and heavy, fragile, made-to-order windows are much less vulnerable to global competition than other products. And, thanks to their inspiring struggle to keep their jobs, they can count on a significant amount of public support. Churches need a lot of glass windows.”
Politics. One of the biggest blocks to the success of the grassroots cooperative and labor movements is the “good old boys” and their political allies. The former owner of Republic Windows and Doors didn’t go bankrupt. He’s still operating a factory in town which will compete with New Era, which is small by comparison. As Martin put it, “They [New Era] don’t have all the inside connections; they don’t have all the backroom buddies.”
When Serious Energy decided to renege on their pledge to sell the company to the workers and instead sell the factory equipment off for parts, one of the investors most likely to profit from Serious’s shady sell-off is Mesirow Financial, a financial firm with close ties to Chicago Mayor Rahm Emanuel. Mesirow made a $15 million investment in Serious in 2009. Thomas E. Galuhn, a senior managing director at Mesirow Financial, sits on the board of directors at Serious.
When President Obama’s long time political ally and adviser, Mayor Emanuel graced the cover of Michigan Avenue magazine this May, the party for the issue was hosted at Mesirow’s swank Chicago headquarters. In December 2011, Emanuel appointed Olga Camargo, still senior VP of Mesirow, to the City of Chicago Plan Commission, which, among other things, reviews city development plans and long-term “community projects.”
Industrial Policy.The workers at New Era don’t need a massive profit margin to be viable, and they live in a community that needs good, modern windows. But if we are going to create an economy of justice, we need not just new popular pressure and new politicians; we need new models of production, distribution, marketing and ownership. If the plant were operated without fat CEO salaries and with very differently invested shareholders, would the decisions now being made, be different?
It’s in this sort of situation that a functioning industrial policy could make all the difference, says Brendan Martin, who founded The Working World to help support worker-run businesses. In tough economic times, keeping a factory in place in a hard-hit community helps the entire local economy. The U.S. government, one of the most resistant governments to the cooperative concept, has, through its Small Business Administration approved giving loans to cooperatives and has changed the regulations to make the interstate sale of cooperative projects easier. The economic stimulus package of 2009 helped keep the then floundering Serious Energy company afloat but it wasn’t enough.
A newly-announced city plan to retrofit Chicago for energy efficiency could offer a green windows company a mountain of useful business. But it’s going be heavy lifting for the workers to raise enough money to buy even the minimum amount of equipment they’ll need to go into production, let alone the most top-of-line technology.
New Era workers had been hoping that Emanuel’s “Refit Chicago” plan to retrofit city buildings could be a source of good contracts for their conveniently located, energy-efficient window business. “Rahm could do the right thing, or he could watch this become his Bain Capital,” said Brendan Martin.
Instead, with supporters Van Jones and Michael Moore at their side, New Era workers and their friends marched on the mayor’s pals at Mesirow last month asking why the well-off firm would rather make a quick mean buck than keep viable jobs in a low-income, high unemployment community.
Why Coops? It’s not just about profits, says Macklin, it’s about sustaining communities, keeping jobs in places where people need them. He’s even heard rumors that some coops create credit unions, capable of proffering student loans to needy families. Helping workers’ kids get an education is not part of a profit-above-all-else business plan, he agrees, but worker coops are free to devise their own priorities. Many worker coops, like Si se Puede, a cleaning coop in New York which only uses environmentally safe cleaning chemicals or Rimaflow, a recycling coop that opened in Italy this March as the result of a worker takeover, have incorporated green principals into their bylaws.
Si Se Puede
In a regular capitalist business, the owners’ agenda is always different from the workers, but in a coop, the workers’ and the owners’ are one and same. So far, the New Era workers have decided that all the worker/owners will earn equal wages and each will have one vote in decision-making. Each worker will each have to raise a fee of $1,000 to “buy in.” It’s a stretch in hard times, and Macklin, who is 58, borrowed some of his “buy-in” from a nephew. Still, he believes New Era will be able to compete even after two companies have thrown in the towel, because:
“There will be no big, fat-cat salaries, no CEOs, CFOs and COOs to pay – so our bottom line will be easier. We already know how to make the best windows and we’re learning how to promote and sell. [...] In opening up this plant we have learned we are so much more than what we thought we were,” Macklin said. “In opening up this plant we’ve done our own electrical work, we’ve done the plumbing work. And all we thought was we were just window makers.”