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Justice Follows Direct Action: Former Boss of Occupied Chicago Factory Jailed
Richard Gillman, the former CEO of Chicago's Republic Windows and Doors factory where over 200 workers organized a victorious sit-in last year, has been sent to jail on eight charges including felony, theft, fraud, and money laundering. After the judge announced the $10 million bail, the shocked and dazed Gillman, dressed in a pin-striped suit, was hauled away to the county jail.
Union leaders Melvin Maclin (left) and Armando Robles react to the arrest of Republic Windows CEO Richard Gillman. "I think God is good," Maclin said before breaking out in laughter. (Tribune photo by Terrence Antonio James / September 10, 2009) Republic workers captured the attention of the world when they occupied their plant on December 5, 2008 calling for the severance and vacation pay they were due. The sit-in ended six days later when the Bank of America and other lenders to Republic agreed to pay the workers the approximately $2 million owed to them. Recently, the workers won another victory with the arrest of Gillman.
The prosecutors charge that Gillman defrauded creditors of over $10 million, and then went ahead to use company money to complete payments on leases for two luxury cars – while his employees went without pay.
According to court records Gillman also secretly sent three semi-trailers full of equipment from the Republic factory to a non-unionized factory in Iowa without the consent of Republic board members and creditors. Luckily, however, the organized Republic workers followed the trailers, and during the occupation, prevented executives from entering the factory to take company documents that now make up much of the case against Gillman and other Republic officials.
"Gillman and others knew this company was headed for closure," Anita Alvarez, the Cook County state's attorney, told reporters. "And instead of fulfilling their legal obligations to their creditors and their moral obligations to their employees, they devised a scheme to benefit themselves."
"We knew Gillman was lying to us for a long time, now the rest of the world knows it too," said Armando Robles, the President of UE Local 1110, the Republic workers' union. "Workers suffer with bad bosses all the time so this is a victory for all workers."
Gillman's arrest is just one of the results of the Republic workers' actions. In February of this year, Serious Materials ended up buying up Republic for $145 million, promising to put the unemployed workers back on the job. The California-based Serious makes heating efficient windows.
"Having another company reopen the factory was always our hope when we occupied the factory in December," Robles told the New York Times.
Kevin Surace, the chief executive officer of Serious, was drawn to the Republic workers' story, leading him to eventually acquire the bankrupt factory. "It was very sad to see what looks like it could be a world-class operation just fall on terrible hard times and then all of the workers quite abruptly laid off," he said. "We saw a great opportunity with a great facility and great workers." Another thing that attracted Surace to the Republic plant was that 90% of the equipment was still there – thanks to the workers who prevented the bosses from hauling it away.
However, only fifteen former Republic employees have been rehired so far. According to Chicago-based journalist Kari Lydersen of In These Times, the delay in hiring more workers could have to do with the fact that Obama's federal stimulus for green jobs and heating efficient windows has been slower in producing results than people had hoped. Yet Lydersen points out that the Republic workers "know they can't just sit back and wait for the stimulus or the factory's new owner to make everything all right."
Meanwhile, Gillman is facing justice thanks to the workers' actions. Melvin Maclin, a former Republic worker who is currently unemployed and the father of six children, commented on Gillman's arrest in a UE statement, "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."
Benjamin Dangl is the author of the forthcoming book, Dancing with Dynamite: Social Movements and States in Latin America, (AK Press, 2010). He edits TowardFreedom.com, a progressive perspective on world events. Email Bendangl(at)gmail(dot)com
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21 Comments so far
Show AllApparently, Gilman didn't steal enough money to bribe the right people.
CEO or not, Gilman is a small fish. This story may make some folks feel good but it's relatively unimportant.
q
What is important is the struggle of the workers in that situation. They showed that if the trade union movement is prepared to adopt class struggle policies, rather than compromise with the capitalists, victory is possible.
I am all for small victories, and I am sure the conviction is both satisfying and useful for the union folks.
However, this guy apparently also defrauded his investors. You have to wonder whether that's not what got him busted.
Most every corporation defrauds there shareholders and creditors by not truthfully disclosing ALL the risk associated with doing business. For example, failure to disclose the risk that stock shares traded on US exchanges are illegally manipulated constantly and are quite likely "watered" (diluted) in the course of the illegal manipulations. Many aspects of systemic risk are almost always ignored as we just witnessed with the so-called credit crisis. No company I know of said anything about the risk inherent in the "liberalization" of financial markets. Large institutional investors like CalStrs stand to recoup much of their loses through lawsuits that detail this lack of proper disclosure.
My point is that activist shareholders have the power to get CEOs and other officers sitting on Boards of Directors busted for their illicit dealings and other machinations that exposed their companies to additional yet undisclosed risk.
So he is slime in several ways. Most of them are. They sequester the favored investors with inside information and / or in some kind of preferred stock or partners' accounts. Then they screw the workers, the consumers, the public, the investors and the taxpayers - frequently with the help of the government.
The only bright spot in this picture is that holders of common stock can vote; that would be great if they had access to important information about the company, which they often do not. Also, the investors are frequently at the mercy of pension funds and other intermediaries that may or may not exercise due diligence.
Joe
Back in the day, Republic Windows and Doors did business with a business that I worked for. They constantly slow-walked paying their bills and had so many excuses it was ridiculous. I doesn't suprise me at all that Gillman is finally getting his just reward.
"The prosecutors charge that Gillman defrauded creditors of over $10 million, and then went ahead to use company money to complete payments on leases for two luxury cars – while his employees went without pay."
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This probably explains:
1. Why BOA made good on the workers stolen pay.
2. Why the investigation has gotten this far--you screw your banker and other creditors at your own peril.
It's nice that workers have the chance to go back to their jobs and that the local economy will benefit from the plant reopening, but given the history of law enforcement's attitude towards organized labor, I seriously doubt this action had anything to do with the cause of workers as much as it does sucking up to a bigger financial fish's suffering.
What will change my mind is when the chief executives and personnel department heads of companies also get thrown in the slammer along with their illegal immigrant work forces arrested by ICE. Ditto for executives of companies which are responsible for toxic environmental pollution as identified by EPA. Ditto for mine owners and CEO's of companies which violate mine-safety regulations. You get the idea by now.
Poet
Excellent.
And kudos to Obama for supporting the sit-in last year.
Where is that Obama now?
Joe
In our dreams.
The lesson of Republic Windows and Doors is that its union workers had the balls to fight the greed of capitalism. With the weakening of union membership in the U.S., the American public no longer has the balls to fight the greed of capitalism.
I can't wait to go to work this pm to see how MSNBC will cover this story, if at all!
-30-
I bet Ed Shultz will, he seems passionate on labor issues.
"A journey of a thousand miles begins with one step"
Hopefully this will be the right step in the right direction.
And especially at a time when the only true form of 'Democracy ' ever known , 'Organized Labor' in the form of 'Unions' is 'under fire', this could be a very good thing for many more poeple.
Hey, America, you show me some 'good sides of you' just often enough to keep me 'hoping'.
Good Luck.....
A good start. Now let us move on to Bank of America and Merrill Lynch CEO's
Agreed. And all the others.
Does anyone have a really good, comprehensive listing of the many examples like this over last few years, like Ken Lay and other stories, that shows just how utterly corrupt the "free market" - a dangerous snake without eyes - has become? Just a list of the corporations and who was charged with what.
thanks
The workers at Republic dared to dream that they had some power and could fight back. That started the ball rolling and allowed the activities of the owners to come to light. Otherwise it might have been just another plant closing and people without jobs, scattered and alone each on his or her own.
It would be great if the CEO were sentenced to jail and to give the factory to the workers so they could run it. After attending a meeting in which they spoke, I'll bet they could!
Joe
Give it time, the GOPpers will lie their way back into the White House in 2012 and the new "president/shill to big money" will just pardon the creep Gilmore. Then they'll pass idiotic laws to make theft of the public by any CEO legal. It wouldn't surprise me if the GOP voted to make any CEO immune from prosecution like they're the head of state from a foreign land. Multinationals could certainly qualify, huh? They have sovereignty over everything don't they? Give the bastards time.
There is a labor situation in the Bronx, NY which bears watching. The Stella Doro bakery plant had a long strike of almost a year against new owners in a fight to save their pay level, healthcare and vacation time. It was seemingly successfully resolved, only now to face the that those new owners are now selling the plant to another corporation, which it appears is planning to move the plant to Ohio. For more info see Labor Notes at: http://labornotes.org/node/2419
Great Development in this story. If you want more dirt, be sure to read Kari Lydersen's excellent book "Revolt on Goose Island: The Chicago Factory Takeover, and What It Says About the Economic Crisis"