Illinois Governor Rod Blagojevich says that Bank of America received a big bailout from the government on the condition that it be used to open up the credit pipelines again but so far has decided to hoard it and keep credit tight instead. He said:
On the one hand, powerful special interest get the money to bail them out, the banks, and yet the purpose of that money was supposed to be to provide a line of credit to businesses like this to keep workers working and keep people employed, and yet the Bank of America has yet to step up and say they're going to be helpful to this company...
BoA responded that it's "not responsible for Republic's financial obligations to its employees." BoA officials are supposed to meet this afternoon with Republic executives and union leaders.
Illinois Governor Suspends Business With Bank Of America [Huffington Post] (Thanks to Abe!)
]]>Just remember folks, you're assuming you know the whole story but you don't. You have no idea whether or not the window company is a good credit risk or not. BofA has no trouble giving credit to solvent companies. It's perfectly acceptable for them to look at the company's books and decide that they're not a good risk. This is business, people, not a love affair.
The free market system works just fine as long as artificially introduced changes to that market don't occur such as strong-arming lenders into giving home loans to people who could never afford them lest they be labeled a racist company. Altruism is never a good reason for making a bad business decision.
]]>@Jonbo298: by the way the bailout money was supposed to be to lend to people to buy houses.
]]>Either that, or BoA sent the FBI after him as retaliation for his refusal to do business with them. But if BoA has that much power over the FBI, SHOOT ME NOW.
]]>Oops.
]]>@Valhawk: Acutally, BoA has been one of the more responsible banks since the begining.
I just hate them, it's deep seeded and irrational but it exsists and it's not going to change. Hell I'm invested in BoA but I'd take the hit on my books to see them stumble.
What I wouldnt give to see BoA begging congress for money.
]]>He has been arrested for trying to sell Barrack Obama's Senate seat and various other fun stuff
]]>I doubt Rod's going to have much influence on BoA now that he's been arrested.
]]>@SadSam: Funny times in America. Here in Canada, I can't get a window company to install a window before February/March they're so over-booked. They should sell their excess capacity and bring some workers over here.
]]>You beat me too it :(
]]>When the chips are down, espouse Populism!
]]>Most of the large banks that received some of the bailout did not want it. The executves told Paulson to his face hey didn't want anything, but they couldn't stop him from buying public shares.
If I default on my BofA credit card and they close my account should I expect them to reopen it and up my credit limit so I can buy gas or food? No. Just like with the mortgage meltdown. Everyone is quick to blame the large corporations, but no one wants to look in the mirror.
]]>This is the problem, though: you and I care. We go on Consumerist and we write letters and spread word of mouth, both good and bad where we think it's warranted. But, we are a drop in the bucket, we are specks of dust compared to the kind of people in the previous story who jeered as a Walmart worker died in front of them.
]]>think about it this way: you loan someone $50, they have paid you back $1, they are about to move across the country, and right before they move, they come ask you for another $50 for gas money. If you were to make the "loan", you would then be out $99 instead of only being out $49.
[see [www.marketwatch.com] for BofA's statement]
]]>Didn't we just chastise them for making loans that would never be repaid?
]]>You can't tell banks to lend responsibly and then harp on them when they won't lend to a business that's going into bankruptcy.
]]>You, as a taxpayer and as an implicit investor in all major banks get screwed. Republic Windows walks away.
Hopefully you're starting to think about this.
Oh, and wasn't a big reason why we're in this economic mess was because banks were lending money to people who couldn't afford to pay it back? Haven't we LEARNED ANYTHING?
]]>Still don't know what BofA's loan was - was it a secured line of credit or a general unsecured?
]]>You've got a business which can't even afford to play its employees? Doesn't sound like a very good financial risk to me...
]]>@Erwos: I am with you on this one.
@LostAngeles: I think you are misunderstanding Atlas Shrugged. The people who would leave us now are the TRUE minds of industry...not the ones cashing in and producing nothing.
]]>The Governor should step up and personally guarantee the loan. If he won't, he should STFU.
]]>God bless America!!
]]>@KeeganGwar: Because they're lazy...that one extra keystroke kills 'em ;)
]]>@aftercancer: Wow, I would definitely be interested in finding out who financed that, and how they qualified for that financing. Interesting.
]]>@QueridaNemo: Let's see...the governor and Obama have in common that they are Democrats from Illinois and ran on a change & reform platform. Therefore, they are the same?
I'm not even counting the Rezko thing, because that's just so old and beaten, it's embarassing.
]]>@Git Em SteveDave loves this guy->★:
Um, BoA and JPM are two entirely different companies. That's sort of like saying that GM owns a piece of them, so Toyota's liable.
]]>Scumbag Republic Windows refuses to pay their employees and BOA is punished?
Howabout seizing the personal property of those overpaid Republic Execs and paying the employees out of the proceeds. Of course the annual bonus should be seized as well.
]]>@QueridaNemo: Your "typo" removed all sense of respect I could have had for anything you ever say ever.
]]>This company obviously has some assets left in the state, a building and contents, possibly product. The state needs to seize that to hold to pay the workers. They also need to pursue this slight of hand that they may have reemerged as another company in Iowa and if true start seizing assets there.
BoA owes us. We bailed their greedy short sighted behinds out. It looks like the state and the bankruptcy court could do something to assure BoA gets paid back if nothing with the sale of existing assets.
If the banks are not going to use that money for the intended purposes we need to demand it all back right now and use it for jobs programs and mortgage rewrites.
]]>@coan_net: Yeah, what if the factory stopped paying their bill or something? BoA can't say why they closed the line of credit. It could be for any number of reasons.
]]>Note to Congress: You have no f*cking clue. I WANT MY MONEY BACK.
]]>That is just what you want BofA to do is just throw away money and know they will never see it again.
]]>@coan_net: As I understand it, the factory will be closing regardless, but BoA has shut down the company's line of credit preventing Republic from paying out severence and vacation pay and cancelling their health insurance.
]]>This was on [communityorganizer.wordpress.com]
So some of the principals of Republic Windows and Doors form a new company, Echo Windows LLC, and while laying off their Illinois workers are busy buying another company. Who financed THAT? I'll try to makes sense of all this, but it's coming in pretty fast. Meantime, here's another that includes this announcement, in Door and Window Manufacturer Magazine:
TRACO has announced the sale of its residential vinyl replacement division to Echo Windows LLC. Echo Windows will assume all TRACO residential vinyl manufacturing and sales operations, and will continue manufacturing TRACO's Sienna Series and Power Two composite vinyl/aluminum windows in the Red Oak, Iowa, facility, which was purchased as part of the agreement.
]]>Let's fast-forward six months and read the story about Republic going bankrupt on accusations of corruption and bad books.
]]>@Anathema777: Yeah, but who knows how many other creditors will be scrambling over that merchandise as well?
]]>This would result in more insolvent banks and more bailouts. Shitty business owners aren't BofA's fault.
]]>...Not seeing the problem here.
]]>Please remember a very important part of the situation here: Gov. Blago is ONLY doing this to try and help himself politically. He doesn't really care about the workers, he is just trying to score points to help out his reputation, which is in the crapper.
This angers me as much as the entire situation. While BOA is supposed to be loosening lines of credit, they aren't, but I don't think it's gov'ts. role to be telling private enterprise who they can and can't lend to. But since the bailout, the entire system is fucked and it seems the rules don't count anywhere anymore.
If the workers are entitled to severance pay and vacation pay per their contract, it should be honored, plain and simple, regardless of who or what caused the company to close its doors.
But again, Blago's motives are purely selfish and politically motivated.
]]>Just because there was a bailout doesn't mean that all common sense is abandoned.
If the governor is mad at the people being laid off improperly, go after the business owners, who are doing the misdeeds. The bank, and every other bank like it, is just operating by normal rules.
]]>@Anathema777: @Andr0: You're welcome to think as much. That does not mean the law agrees with you.
]]>@Git Em SteveDave loves this guy->★:
The bank though is a private business. Where as the govt is well, just that. It's not private and its funded by everyone and not for profit. BofA is a for profit business. If you help out a for profit business they should help back.
I can see it from both sides, why BofA said no and why the states pissed. I think the state is just using this as an example to run with the idea. More of a scapegoat if you will.
]]>Besides, BoA-bashing is just too much fun to pass up.
]]>Atlas Shrugged is coming to life, and I am completely terrified.
]]>Riiight...
]]>What does matter is that the State of Illinois is trying a grassroots tactic to get the bank to do what it is supposed to do...
]]>I still don't see how that should force BofA to loan money to an insolvent company who obviously won't be able to pay it back. It seems like bailout by proxy to me.
Which is fine, I just wish they'd call it what it is.
]]>@ohiomensch: Wow lower your deal to 4.42% from 16.89%??? Some people would love 16.89% versus 29.99%.
It sounds like they are trying to get you on a different loan (60 months)versus paying down your exisiting CC debt.
]]>@mookiemookie: They're a creditor that got bailed out by the government because they argued that they were too big to fail. In return, they were supposed to help prop up the failing economy that bailed them out. I think that gives them an obligation.
]]>@m4ximusprim3: Often states have work clauses which require businesses to notify workers within a certain time that they are being laid off - for any reason. I just heard on the radio this morning that the company had not complied with any of the State of IL requirements to lay off workers.
]]>Ever since BoA received a slice of $700B cake funded by taxes paid by those same workers. Whether you (and BoA) like it or not, BoA is now indebted to pretty much all the tax-payers of USA. Perhaps we should reduce the limit on their credit card and bump up the APR...
]]>The point of the bailout was supposed to be to purchase bad debt so that the banks could continue to lend funds. Lending increases businesses at all levels and stabilizes the economy from the bottom-up. Unfortunately, that isn't what is happening. The bailout has been used to save AIG, to let big banks gobble up little banks, and to keep many financial institutions afloat, when they should have closed their doors two months ago.
]]>I got an interesting phone call from BofA this morning. I have/had a line of credit with them, and they were looking for me to somehow pay more than the minimum payment each month like I used to.
I ran into some financial difficulty (unemployed for nearly a year) I was late on a few payments and frankly, they treated me like I was some kind of criminal. I have diligently paid them on time for months now, Called repeatedly and begged for interest rate decreases and was always told no.
Right now I am doing Dave Ramsey's snowball plan and have managed to pay off quite a chunk of my debt. They offered to lower my interest rate to 4.42% (from 16.89) if I agreed to close the account and pay it off in 60 months. I was planning to close it anyway as soon as I pay it off. They emphasized over and over, that they wanted me to consider my experience with them as being a good one and that they were aware that their reputation was not the best and were making efforts to change that. I still don't know what to think of it.
]]>So the company has already declared bankruptcy and the workers and state are mad at BOA for cancelling a line of credit. Not knowing the details and recognizing that it sucks for the workers it seems reasonable for BOA to cancel a line of credit for a bankrupt company as it seems unlikely that BOA would ever get paid back on that LOC. Shouldn't the workers be looking to the company for compensation?
]]>@rpm773: You just 'sploded my head
]]>While this story makes me quiver because it's government and buisness...I realize two things.
1. That the bailout was supposed to trickle down but it seems to be stuck in the wallets of the banks
2. I really fucking hate Bank of America, if Ken Lay went to Guantanamo, I'd end up being a hypocrite because I'd be the first one on the phone with his congressman begging to keep it open "Cant we waterboard him just five more hours!??!?!?"
Oh and yes as far as "being a threat to America"
Terrorist < Bank of America
/bitter
]]>BofA (and believe me, I hate them too) is refusing to loan money to a company which has already shut down, on the basis that they won't get paid back. That seems reasonable to me. It sucks that the company went out of business, but the fact that BofA won't lend to a business which has no revenue stream and is probably already in debt seems smart to me.
Am I missing something>
]]>@Corporate_guy: Doesn't this company still have a lot of merchandise? I think that even if the factory closes, BOA should be able to recoup their losses with those items.
]]>That's what the media and politicians are for..sorting out the finer points of such thorny issues. At least they've always done such a great job with it in the past.
/switching sarcaso-meter off...
]]>I agree that BoA sucks, but did we keep them from failing just to encourage them to fail later?
]]>@SadSam: It's not so much about taking care of this company, which has already decalred bankruptcy. It's about not leaving the workers in the lurch.The workers really just want to be paid for the work they've already done. The company is closing down, but the workers aren't being given the severance pay that is due to them
]]>Come on people, Republic Windows and Doors is obviously a failing company that would default on any additional credit BoA gave them. Otherwise BoA wouldn't have yanked their line of credit in the first place.
]]>The gov. should be putting pressure on banks that participated in the great $700 billion bail out to lend that money to local companies. But should BOA be lending to a company that makes windows and doors when the construction industry is in the crapper? Who gets to make that call?
]]>I'm still wondering if there is more that Republic Windows & Doors has not said - and just blamed BoA as an excuse they told their workers... and now that it has blown up to a major story..... it will be interesting.
]]>