By the time you’re reading this, perhaps Charlotte-based Bank of America will have come to its senses and worked out a way to help provide severance pay and other benefits to the 250 or so laid-off workers conducting a sit-in at a Chicago window and door factory.
If it doesn’t, BofA honcho Ken Lewis is a lot more tone deaf than his track record suggests or his $17 million payment package (for 2007) would indicate. If you think bad loans are a drag on the balance sheet, imagine how much ill will this spectacle puts on the public-relations ledger as it plays out on cable news shows and newspaper headlines across the nation. No, Bank of America didn’t create the situation, yet it does have the wherewithal to help defuse it.
The bank may well have cold technicalities on its side in initially refusing to intervene. Bank of America is the creditor for Republic Windows and Doors, and as such, its financial obligation extends to providing cash for the business end of things. Technically, that doesn’t include providing or guaranteeing funds to cover the severance packages for employees who received only three days notice last week when declining revenues forced the factory to shut its doors.
But if we’re dealing in cold technicalities, taxpayers can trump that one pretty easily. Bank of America has received $25 billion from the government’s financial recue package. While that money flows through the government, the ultimate creditor for it is the American taxpayer. It’s the taxpayers, their children and grandchildren, who are underwriting this ó and technically, they have absolutely no obligation to pay for multibillion-dollar bailout packages to extend credit lifelines to investment firms, banks, automakers and whatever other industries may ultimately get emergency loans. But our elected representatives have determined that it’s in our best longterm interests to inject this cash into the economy, so we’re going along without staging a massive taxpayer sit-in.
The situation in Chicago will provoke strong reactions ó and sympathy ó locally among laidoff textile workers and others who’ve had to battle, or are still battling, for paychecks and benefits they rightly earned. The rationale for big-bucks bailout packages is that many of these companies are “too big to fail.” Does that mean individual workers are too small to matter? Too often, that appears to be the case.
In Washington, there’s a mounting call for some rescue funds to go directly into the hands of people who face foreclosure and may be on the brink of bankruptcy ó people like the protesters in Chicago. Those laid-off workers didn’t hold a sit-in to ask for a handout or a bailout. They simply want what they’ve earned. President-elect Barack Obama has promised that future stimulus packages will do more for struggling individuals, but that won’t happen in time to help these workers. Bank of America shouldn’t be portrayed as the bad guy. It didn’t cause Republic Windows and Doors to go under. Nonetheless, it has the resources to provide some relief ó and by doing so would become a laudable benefactor rather than another symbol of corporate disconnect from middle America.