Progress Illinois

About two weeks ago, the owners of Quad City Die Casting in Moline, IL notified their 100 employees that the 60 year-old plant would be closing its doors come July 12. The reason? The company's main creditor, Wells Fargo, had opted to cut off its financing. Like the 1,000 Illinois employees of Hartmarx, Inc. -- whose continuing operations are also threatened by Wells Fargo -- the Moline workers are fighting back.

Eighty of the Quad City Die Casting laborers are members of United Electrical Workers, the same union that represents the former Republic Windows (now-Serious Materials) employees. Yesterday afternoon, a delegation from UE Local 1174 crossed the Mississippi and headed to Wells Fargo's regional corporate offices in Davenport, IA.  Once there, they asked for a meeting with representatives of the bank to discuss alternatives to liquidating the company.  Driving back to Chicago from Moline yesterday, UE organizer Leah Fried told us they were met with this response: "Thanks for coming, but we're not going to talk about it."  The following report from WQAD includes video from their protest outside the bank's offices.

Fried explained that a die casting factory "builds molds for aluminum machine parts -- from escalator stairs to John Deere parts to engines for recreational vehicles."  She noted that these types of plants have faded from the American manufacturing landscape over the years, but emphasized that Quad City is "a leader in the industry."  "This is a company that has staying power," Fried said. "But they need financing.  We're talking about thousands of dollars -- not millions."

As Fried said in the video above, the company was apparently profitable as recently as late 2008.  And a May 14 Quad-City Times article noted that Wells Fargo's rationale for cutting off credit is unclear:

Curtin said the union does not know if the closing is based on sales, finances or what. “If there’s anything that can be done to keep that place open, it’s good for us, it’s good for the community.”

“We’re not throwing stones at anybody,” he said, describing the Debrey family — the owners who founded the business 60 years ago — as “allies.”

“I think the only solution would be to keep it open. We’re dead set against liquidation.”

However, Curtin said a third party, High Ridge Partners, has been brought in — presumably to work out a liquidation. “On the other hand, they’re a company that also has worked with some places to turn businesses around,” he added.

Meanwhile, we received the following statement from Wells Fargo in response to an inquiry about the company:

We empathize with the employees affected by Quad-City Die Casting’s decision to close its plant. We work with our customers who are having financial difficulties as prudently as we can. We want them to be able to succeed financially and stay in business.  

Wells Fargo has used the Capital Purchase Program (CPP) funds to make more loans to creditworthy customers. Since last October, when Wells Fargo received this investment from the U.S. Treasury, we have extended more than $225 billion of credit to U.S. consumers and businesses – nine times the amount of the investment in Wells Fargo. To date, we have paid $684 million in dividends on the government investment.

We cannot comment further on this particular situation, however, since our customer relationships are confidential.

Fried said the union plans to reach out to its allies in the Quad Cities community and continue to pressure the creditor for a meeting.  "The reason these banks got $25 billion was to get credit flowing," she said, referring to the amount of Troubled Asset Recovery Program (TARP) funds received by Wells Fargo.  "But this is exactly the opposite of what the Americans want to see.  Wells Fargo is a repeat offender."

We'll have more details on this campaign as they surface.  Also, check back tomorrow on more details regarding the Hartmarx situation.