December 10, 2008 / 7:19 PM / 11 years ago

Chase offers $400,000 in Chicago factory sit-in

CHICAGO (Reuters) - JPMorgan Chase & Co offered $400,000 on Wednesday to help pay severance to laid-off workers occupying a Chicago factory, whose protest has come to symbolize resentment over the federal bailout of big banks while workers suffer.

Protesters walk the sidewalk outside the Bank of America building in support of the 200 laid-off workers of Republic Windows and Doors across the street from Obama's transition office in Chicago, December 10, 2008. REUTERS/Jeff Haynes

JPMorgan Chase’s offer, announced by U.S. Rep. Luis Gutierrez, who has been mediating the dispute, follows on Bank of America Corp’s pledge to make an unspecified, limited loan to Republic Windows & Doors on behalf of the 250 workers.

Both banks are creditors of Republic, a family-owned window and door manufacturer that fell victim to the housing downturn and shut down on Friday.

In July, JPMorgan wrote off a $7 million investment and $5 million loan that gave it a 40 percent stake in Republic, and resigned its seat on the company’s board, a spokesman said.

The workers, who were given three days’ notice of the closure, have occupied the shuttered plant since then, demanding a legally mandated 60 days’ pay for severance, and accrued vacation pay.

JPMorgan Chase’s $400,000 pledge was described by Gutierrez as capital, and how the transfer would be structured was still to be worked out, a spokeswoman for the Illinois Democrat said.

Bank of America said its additional loan to Republic would have to be negotiated, as its previous line of credit to the company had “maxed out.”

Several hundred supporters of the workers marched on Bank of America’s Chicago offices, where negotiations among the parties were set to resume for a third day.

The worker sit-in that began on Friday has become a symbol of Main Street resentment of the federal bailout of Wall Street banks, which Bank of America has tapped for $15 billion and JPMorgan for $25 billion.

President-elect Barack Obama and other politicians have voiced support for the workers’ cause, arguing that the Wall Street bailout was not serving its purpose to loosen credit for Main Street businesses.

Democratic Illinois Gov. Rod Blagojevich, on the day before he was charged with corruption in office, had said he was ordering a withdrawal of state business from Bank of America. A spokeswoman for the governor said it was “premature” to discuss what actions were being taken, since there were promising signs that the factory dispute was nearer a resolution.

Additional reporting by Deborah Charles, editing by Gerald E. McCormick, Richard Chang

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