CHICAGO (Reuters) - Bank of America will lose out on “hundreds of millions” in fees and commissions from the state of Illinois if it fails to help laid-off workers occupying a Chicago factory, the governor said on Monday.
Gov. Rod Blagojevich, a Democrat, visited Republic Windows & Doors where 250 union workers have camped out in shifts continuously since Friday, demanding severance and vacation pay after the family-owned business gave them just three days notice of the plant’s closing.
Bank of America, the recipient of $15 billion of federal bailout funds, said in a statement it “cannot control whether the company complies with applicable laws or honors its commitment to its employees.”
The company told workers last week the bank had shut off its line of credit and refused to allow further expenditures.
The shuttered factory, a victim of the downturn in residential construction, has come to symbolize the plight of unemployed workers caught in the recession and resentment of the federal bailout of Wall Street banks, while Main Street businesses wither.
Blagojevich said the state would withhold business worth “hundreds of millions” of dollars from Bank of America, consisting of fees, commissions and other payments until it provided funding to pay the workers.
The governor’s spokeswoman, Kelley Quinn, clarified that “we’re starting the process of suspending business with Bank of America ... but we’re hopeful we don’t have to go all the way through with it.”
Quinn said the state could cancel Bank of America credit cards issued to some state employees and the bank could be barred from participating in state loan activity, such as this week’s planned $1.4 billion note sale.
The workers were to meet with the company and the bank later on Monday to discuss demand by workers to be paid for a legally mandated 60 days worth of severance and unused vacation time.
Asked about the dispute at a news conference on Sunday, President-elect Barack Obama expressed his support for the workers and said the situation highlighted the need for a strong financial system to supply credit to businesses.
“It’s also important for us to make sure that the plans and programs that we design aren’t just targeted at maintaining the solvency of banks, but they’re designed also to get money out the door and to help people on Main Street,” Obama added.
Editing by Andre Grenon