Menswear maker Hart Schaffner Marx has been in a bind. Known as Hartmarx, the financially troubled company has been under pressure by its creditors—particularly banking giant Wells Fargo—to liquidate. Liquidation would essentially shutter the Des Plaines, Ill., company and result in the selling off of all its assets, leaving its workers jobless. In usual times, creditors pursue liquidations in a casual fashion as a means to cut their losses, their profits ruling supreme above all other considerations.
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On May 11, more than 600 Hartmarx workers voted to occupy their factory if Wells Fargo forces the company into liquidation. The very next day, 450 workers at Hartmarx subsidiary Hickey-Freeman in Rochester, N.Y., voted unanimously to take over their factory should their parent company be liquidated.
The Hartmarx workers’ initiative was inspired by the struggle of workers at Chicago’s Republic Windows and Doors, who gained international attention when they occupied their factory in December 2008 to demand their severance pay. If Hartmarx were shut down, more than 3,000 jobs nationwide would go with it, devastating workers and their families. Hartmarx workers are members of Workers United, an affiliate of the Service Employees International Union.
The 120-year-old Hartmarx, now famous for making President Barack Obama’s inaugural-night suit, filed for Chapter 11 bankruptcy protection when it found itself unable to pay back $114 million in loans to Well Fargo, among other unsettled debts. Hartmarx officials announced May 22 that they favored a purchase bid by London-based Emerisque that would keep the company running and save jobs. Emerisque’s bid is its third.
Some analysts believe that Emerisque is the only bidder that will not shut down operations. However, in every merger, purchase or takeover, layoffs and cutbacks are the order of the day—an Emerisque purchase could mean reductions, but the prospect of averting complete closure has won the support of the union.
“The American people supported the banks when they were in trouble,” said Noel Beasley, manager of the Chicago-Midwest Regional Joint Board and executive vice president of Workers United. “Now, Wells Fargo simply has to accept Emerisque’s offer. It is good for all parties concerned.”
However, Wells Fargo has already let expire two previous offers from Emerisque. Officials close to the negotiations, speaking under condition of anonymity, have indicated that the bank appeared to favor a bidder that would pursue liquidation. (New York Times, May 22) As Hartmarx’s primary source of credit, Wells Fargo has the muscle to get its way.
Wells Fargo received $25 billion in taxpayers’ money to bail it out of the financial crisis that it helped create. CEOs from the highest echelons of the financial sector argued that the bailout was a must to shore up the economy. But now that they got their piece of the cash pie, they sit back and relax as businesses fail and workers lose their jobs. For the big banks, “shoring up the economy” has always meant shoring up their own bottom line—no matter how many businesses and workers go under.
The sit-in used in the Republic struggle and now threatened by Hartmarx workers are signs that labor is not only willing to fight, but is seeking new tactics amid the economic crisis. The traditional labor tactic of shutting down production through strikes is not nearly as effective when the capitalists are seeking to shut down production permanently through layoffs.
The mere threat of workers’ occupations has shined a spotlight on the shameless profiteering of the big banks, and garnered widespread support from a public already outraged with the bailouts. The attention has forced politicians to take a position: Democratic Illinois Treasurer Alex Giannoulias has threatened to drop Wells Fargo as the treasurer’s office’s money custodian and take it off the state’s list of preferred vendors; Ninth District Rep. Jan Schakowsky (D-Ill.) stated that she would see that Wells Fargo would not receive any more bailout money should Hartmarx shut down. More than 40 members of Congress have expressed support for keeping Hartmarx running.
The conditions created by the present crisis of capitalism are compelling workers to take matters into their own hands as a matter of survival. Factory sit-ins and occupations were a major tactic behind the labor victories in the 1930s, paving the way to the heyday of the U.S. labor movement.
As workers throughout the country look for a way out, the struggles at Republic Windows and Doors and Hartmarx show that it is possible for labor to develop effective tactics even in the midst of a severe economic downturn. They are sending a message to the ruling class that it cannot do as it pleases without facing resistance, and telling workers that they do not have to be passive victims of the decisions of the bosses and the big banks. A fight back movement is not only possible—it is a must.
