January 15, 2009
Revolt on Goose Island: The end of the story?
by Melville House
Yesterday, Kari Lydersen broke the story on MobyLives — even before it appeared on the wires — that the workers who took over Republic Windows & Doors may have achieved a startling victory. Today, she fills in more details the newest installment of her Melville House Live Book Project ….
Chicago, 15 Januray 2009 — Kevin Surace, CEO of the California company Serious Materials, which is hoping to buy Republic Windows and Doors, told me media reports of the workers’ struggle caught his eye.
“We read the story, we felt bad for the people, we acted quickly and we think there’s an opportunity to save those jobs,” he said.
Like the workers and union organizers, Surace hopes the bankruptcy trustee and judge and Bank of America -– the company’s main creditor -– quickly approve the sale. While the building and construction components industries as a whole are suffering, Surace said their business in green building materials is thriving. “We’re on fire,” he says proudly. Their products are often sold out and they are looking to increase capacity. “We can save 30, 40, 50 percent of your heating bill in those cold Chicago winters.”
When you enter the Serious Materials website, an animated version of Surace walks onscreen below an image of a pristine mountain lake. He delivers a different message each time, touting Thermaproof Windows and noting his buyers “want to do the right thing to save energy, to save money and to save the environment.”
Surace’s voice projects confidence, efficiency and satisfaction, perhaps from riding the wave of hot green entrepreneurship that lets an innovative company turn profits while others are struggling, and gives them enough of a cushion to make socially conscious corporate decisions to boot. The company is backed with $65 million in venture capital investment, and has gotten national media attention and accolades for a new ecologically friendly drywall product called Ecorock. Traditionally drywall is made out of gypsum that requires large amounts of heat and hence greenhouse gas emissions. Ecorock is made largely from waste diverted from landfills, and it is heated through a chemical reaction rather than fossil fuel burning, so the company calls it “zero-carbon drywall.” They say if it was adopted nationwide, carbon dioxide emissions would be reduced by 25 billion tons.
Surace is excited about adding a Midwestern location to the company’s Colorado, Pennsylvania and California factories. Serious Materials’ windows are different than those made at Republic, but after filling existing orders at Republic he plans a transition to making their trademark ThermaProof and Alpen windows. Surace plans to hire all the Republic Windows workers back, and they will still be represented by the UE.
All of this is contingent upon the bankruptcy trustee and Bank of America agreeing to the sale. The bankruptcy process is mainly focused on seeing creditors paid, wherein options include liquidating all assets and selling them off; selling the business to Serious Materials or holding out for a different buyer. As the largest creditor with a secured loan, Bank of America must approve any decisions.
“It’s up to them to move on this in days, weeks, months, years or never,” said Surace. “It’s completely their call.”
The Bank of America representatives most directly involved in the Republic Windows negotiations, regional director of governmental affairs Pat Holden and spokesperson Julie Westermann, only heard of the sale offer through media reports on Jan. 14 after the union and Serious Materials went public. During a meeting with Holden at the bank’s downtown headquarters, where Westermann joined us by speakerphone, they said the bank would need more information to make any decisions. (A future post will explore Bank of America’s side of the whole story). Holden noted that when they made the $1.35 million loan allowing the workers to be paid, they fully planned to get their money back. Like the bank’s previous $5 million loan to Republic Windows, it was secured by collateral and assets of the company.
When I asked Surace if he thinks a Serious Materials takeover of the factory would end up being profitable for Bank of America and other creditors, Surace said, “Profitable? Those days are probably over. But this is likely to be an outstanding opportunity for everyone involved to do the right thing.”
- Click here for all posts in the series.