A New Republic, part 2

Laid-off workers are occupying the Republic Windows and Doors factory in Chicago, which provides a huge opportunity to find a better way to deal with the growing phenomenon of plant closures, such as today’s announcement that Dow will close or idle 200 plants and lay off 11,000 workers:

Yesterday I introduced the Argentine fabricas recuperadas, or recovered/recuperated workplaces. In these factories and other businesses, the former employees took over their places of employment in the wake of that country’s economic collapse.

In some cases this was done in an illegal fashion, but in many cases they followed a legal process through which they could gain legal ownership by demonstrating that the owners had no plans to reopen. This was usually done through recording that machinery and materials were being removed, as has reportedly been the case at Republic and is part of why workers are guarding the plant.

Everyone involved would benefit from a worker takeover at Republic. The owners would have a chance of getting more cash than they will in a liquidation. The bank will avoid a major PR black eye and taking posession of a closed factory and inventory as the manufacturing economy tanks, and of course the workers get to keep their jobs and become their own bosses (this does not necessarily mean that they have no managers, but that managers are accountable to them).

This afternoon there is a meeting scheduled to “negotiate” among the former employees, employers, and financier of Republic. I have a hard time picturing how this negotiation is going to end well as long as the factory is closed, the owners are broke (other than whatever they’ve squirreled away in their shiny new LLC in Iowa), and BofA is withholding credit.

Rather than holding on to an old business arrangement that is apparently poisoned, the most productive way forward seems to be the creation of a  new worker-owned business. There are many ways this could take shape, but the general path is remarkably similar to what would happen if an outside investor were to buy a failing operation.

The difference would be that this approach would be more likely to succeed. Not only do employee-owned companies generally outperform others, but they also can succeed with less. Because there are no outside investors who must be pleased, employee ownership can work at the break-even point (assuming that wages stay the same).

We should also note that there doesn’t seem to be an investor lined up to buy, and the workers are quite available. They could be making windows and doors while they occupy the plant. Any wages they take from this new operation, and any materials and inventory sold could be deducted against whatever

Financing would be needed, of course, and this is where local credit unions could get involved; presumably some of them have memberships at local credit unions. It seems like local government is interested in this situation, to the point that Cook County is threatening to cut off relations with Bank of America. This could also be a productive avenue for their union, UE, which describes itself as being interested in organization along these democratic lines . Both local government and the union could help back any loans needed.

And who knows, maybe even the Federal government could be convinced to provide some backing. Do they do that?

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