The Republic Story will...

John G. Swanson
December 8, 2008
THE TALK... | Management

Survey Results for 12/10/2008:

The Republic story will…

Have no impact on the industry as a whole

  

 

67.51%

 

Actually be helpful in raising the industry profile

  

 

17.26%

 

Tarnish the industry image

  

 

15.23%

 

The Republic saga appears to be over and the general sense among readers appears to be that the flurry of national attention the story received will have little impact on our industry. And they may be right. Just one week after the sit-in ended, the story has faded from the headlines.

“I believe this really won’t have any effect on the window and door business, other than raising the level of awareness that windows are actually produced somewhere other than Bayport, Minn.,” writes Bob Maynes, VP of marketing at Matthews Bros., a window manufacturer based in Maine. “My expectation was that in three days, no one would remember this story.” He offers one caveat, however. People will remember Rod Blagojevich, he continues, including the image of him at the sit-in and “challenging reporters to ‘bug’ him (‘I don’t care if you tape me privately or notoriously [sic].’).” The image “is forever burned in my memory,” Maynes states. “Thank God for Chicago politics.”

“It's funny how something that on the surface seems negative but in some ways becomes a positive,” writes Phillip LaShum of Dapa Products Inc. “Because friends and family know we are involved in the window industry, I have had more people ask me about the industry this week than any other week I can remember. It's all because they saw something about Republic Window on the news. So, in a weird sort of way, it has drawn more attention to the industry.”

The reason Republic’s workers received so much sympathy was an undercurrent of resentment in the country toward bankers and others in the financial community in the wake of the Wall Street bail-out. That story isn’t going away, and feelings and frustrations about the bail-out were shared by WDweekly readers also. Terry Wiens of Wiens Home Improvement in Hutchinson, Kan., writes:

“Personally, I’m much more concerned with the whole ‘bailout’ scenario and what the outcome will be from that. I don’t like the way we are tampering with the basic principles of capitalism and I think it will all come back to haunt us. Politician’s getting involved in the business world is about as scary as it can get, in my opinion. They can’t run the government efficiently and I sure don’t want them meddling in my business.

“We are only four years old here and although it is slower now than it has been, there is still business out there if you work for it. The whiners and complainers always see the glass half empty and will likely get out of the business at some point. A little shake-up every now and then is good…cream skimmers will take a hike and the rest of us will be left to grow and prosper once this is all past us.”

A Michigan based window dealer writes:

“As I read and listen to more information about the Republic situation, I cannot help but compare this sit-in in a very broad sense to similar actions in the 1930's. Then it was workers united against corporate greed in the form of the manufacturers. Now, ironically, as the economy has shifted from manufacturing dominated to service dominated, the bank gets the brunt of the bad publicity.

However, what I think gets missed in the bigger picture is this-Bank of America is exactly correct in stating that they are under no financial obligation to extend credit to a failing company to pay off workers. I read nothing overtly critical of Republic-did this situation just sneak up on them? Housing starts have been declining for well over a year. The brilliant economists now declare that we've been in recession for a year-no surprise to us in Michigan. Republic is doing a very good job of making Bank of America the scapegoat in this situation, covering up any number of missteps they themselves made over the years. They, and the union, and the politicians point out correctly, that Bank of America has been and now is receiving taxpayer bail-out money. Was the bail-out money truly intended to in turn bail out failing businesses?

At the core of this debate is a woeful lack of oversight at any level. Unfortunately, the belief still prevails that if you throw enough money at a problem, it gets better. History has clearly shown that money, without oversight, strings, carrot/stick - whatever you want to call it is money poorly spent. What is currently happening to Republic's employees is devastating, especially coming in to the holiday season. How many other Republics are out there, and will sit-ins, rhetoric, and the like become the fashion? I certainly hope not. Only well run companies with a realistic approach to the current economic situation deserve to survive-a form of Fiscal Darwinism as it were."

Not that these two gentleman represent all industry opinion, but they clearly reflect one strain of opinion that appears to be gathering strength in this country in the wake of the Wall Street bail-out. The government made a mistake in rescuing the banks and they shouldn’t compound that mistake by bailing out more businesses—like the U.S. automakers. On the opposite side, you have the post-bailout crowd that says if the government is going to rescue Wall Street “to save the economy,” it should be willing to rescue “Main Street.”

That’s an issue that goes well beyond our industry and is likely to be debated much in the coming year, and if Republic is remembered by people, it will be as a footnote in that story. Personally, from an industry perspective, I think that’s probably fortunate.

For those in Republic’s management to say, “We’re losing money here in Chicago, where we have to pay workers a lot more than we would elsewhere,” and “the only way we can be competitive in this business is to have a non-union factory someplace else,” is understandable to a lot of people. Whether you agree with that approach or not, most of us would probably agree it could have been a black eye for our industry to have window plant workers left out in the cold without pay before the holidays—if not literally, but figuratively.

And I think the episode may give us something to consider in the future. We have plenty of industry manufacturers that are pillars in their communities—well known to local leaders and residents. These companies are known to be important local employers and seen as good citizens. Increasingly, they are good environmental stewards too.

It might be in our interest to project an industry-wide image along those same lines. Particularly at a time when there are increasing concerns about our country’s manufacturing infrastructure, it’s good to note that window and door manufacturers still employ a lot of people. Throughout the supply chain, we provide products our country needs to make itself energy independent and lessen our impact on the global environment.

The long-term impact of the Republic story is probably minimal, but perhaps it did help raise awareness of our industry somewhat, as a minority of our poll respondents suggested. That’s something we rarely try to do, and maybe we should consider it for the future.