CHICAGO (Reuters) - Laid-off workers whose sit-in at their closed factory came to symbolize Main Street’s resentment of the Wall Street bailout accepted a settlement on Wednesday that provides them the severance they asked for and two months health care coverage, the parties involved said.
The workers occupying Republic Windows and Doors agreed to the deal worked out after days of negotiations that would provide each with about $7,000, putting an end to the sit-in that began on Friday.
The total cost of $1.75 million was covered by a loan of $1.35 million provided by Bank of America Corp and $400,000 from JPMorgan Chase & Co, both creditors of Republic, said U.S. Rep. Luis Gutierrez, who helped mediate the negotiations.
Each of the more than 200 workers will be paid eight weeks salary, all accrued vacation and receive two months paid healthcare, Gutierrez said. The workers, given just three days notice of the plant’s closing last week, had demanded severance covering the legally mandated two-month notice period plus the vacation pay.
“This money will only be used to pay the workers the benefits they are owed under the law, and it will not, under any circumstance, be used for corporate bonuses, luxury cars or any other perk for the owners of the plant,” Gutierrez, an Illinois Democrat, said in a statement.
The workers’ plight became a media sensation, with food donations pouring in and hundreds of protesters gathering outside Bank of America’s Chicago headquarters, where negotiations among the parties were held this week.
Bank of America, which bore the brunt of the criticism, said Republic was unable to operate profitably and had lost $10 million over the past two years, during which time the bank said it had lent the company the maximum amount it could.
In July, JPMorgan wrote off $5 million in loans and a $7 million investment that gave it a 40 percent stake in Republic, and resigned its seat on the company’s board, a spokesman said.
President-elect Barack Obama and other politicians have voiced support for the workers’ cause, arguing the Wall Street bailout was not serving its purpose of loosening credit for Main Street businesses. Bank of America has tapped the bailout for $15 billion and JPMorgan for $25 billion.
Additional reporting by Deborah Charles and Michael Conlon; editing by Todd Eastham