Kevin Surace bought a shuttered Chicago window factory for $900k after a sit-in by United Electrical union workers forced Bank of America to pay severance. He rehired the workforce and retooled production to make energy-efficient windows that cut building energy use by 30 to 50 percent.
How-to number 2: how to rescue a bankrupt windows plant in Chicago. Please welcome Kevin Surace.
Well, the first question is, who would care, I guess? But there is a reason to care, actually. And, you know, this is the story of a plant that was around for some 40 years, and the owner was caught essentially stealing equipment from the plant to set up a nonunion plant out in Iowa called Echo Windows. Some of you may remember this because on December 3rd, 2008, they closed the plant suddenly with just 2 days of notice. The UE, actually the union there, actually did a sit-in, the first sit-in in the United States in some 30 or 40 years. They start their sit-in on December 5th, and this union, from the media, now look like this very, very militant union. That's Armando Robles, who was the union president of that plant at the time. And so they did their sit-in, and they said, look, Bank of America, you just got $20 billion of TARP money. You're the lead in this creditor situation. Yes, he showed up. He showed up. Everybody showed up. People brought food. There you are on day 3. You'll see that's Armando's kids saying, please don't close our plant. This is all our people know how to do. You had 200 and some odd workers there. They went forward and actually picketed the Bank of America and said, you owe us that 60 days back, that 60 days of severance. You're the lead creditor. They did the sit-in. They got other people who were not sitting in to go ahead and picket this bank. We remember him. He's no longer there. That was the president of Bank of America at the time. He finally capitulated on December 11th. All right, we're going to give you your 60 days of severance. However, unfortunately— well, fortunately, the workers were happy, but unfortunately, they were out of a job, and now we had an empty plant. And so that's when I decided to get involved. I had seen this on the news like everyone else. We saw that it was heading to bankruptcy court, and I did something unique. I got a picture of a really old phone off the web. No, what I did was actually call the— It was the only high-resolution phone I could find. I actually called the union. I did not call the bankruptcy judge. I did not call the attorneys. I did not call the bank. I actually called the union. And I talked to Armando Robles, and I said, listen, I want to buy the plant. And he says, are you serious? I said, actually, I'm Serious Materials. Of course I'm serious. I have to use that joke. So in fact, I went to Chicago. I met with the union. And this is what we talked about. First of all, they were wonderful people. And I said, I would love to take over this plant. Take 300,000 square feet and make a different kind of window, a really high R-value window that would save more energy than anything else that you've ever made here before. We could save 30%, 40%, 50% of energy. By the way, dual-pane windows invented in 1865. They were very energy efficient in 1870. They're not energy efficient today. So we went on. We, in fact, did take over that buy. I went in, took pictures. You could see the line was down, et cetera. And we had to negotiate with the bank. Now, this is a great story because Bank of America, I went to them at first and said, listen, give me the plant for a dollar. It'll be great PR. The workers will come back. No, we want $8 million. So we bid $4 million. Time ran out on a Thursday night at 5 PM. And so we sent a fax at 5:01 and said, how about $2 million? And they said, hold it, what happened to the $4 million? I said, well, now it's $2 million. You've got 24 hours. At 5 PM on Friday night, That expired, and they didn't even take that. And they said, well, what happened to the 2? We said, we're done. We cut a new deal with GE, because GE Credit happened to have a UCC on the equipment, for those of you who knew. And we got that for $900K. We offered a few hundred K more, and in the end, we took over the plant. We brought the workers back, and we had really an amazing time. The workers continue to come back to that plant today.
That's great.
It's 300,000 square feet. The Vice President also visited the plant and in fact loved what we were talking about with winners. There's Armando actually talking to the Vice President. You'll see a book was written about this. Kerry Leiderson wrote Revolt on Goose Island. Yes, someone made a movie about the plant actually. You might recognize the gentleman there. And Richard Gilman is the guy who apparently stole some of the equipment, is now out on bail for $5 million and has to face trial. very shortly. And yes, the Vice President tells wonderful jokes, especially when you're on camera. Thank you so much. That's my quick story. Thank you.
