If It Works For The Car Companies, Why Not Us?

How many more stories like the following are we likely to hear in the future? It looks like the unions, particularly the larger ones with lots of (voting) members have identified a soft touch.

Hartmarx filed for Chapter 11 protection on Monday in an Illinois federal bankruptcy court, citing a “substantial decline” in sales to consumers and retailers, especially at the higher end of its lines. The 137-year-old company, which owns Hickey-Freeman and Hart Schaffner & Marx, which has made President Obama’s suits and inaugural tuxedo, also cited that it's banking group cited a default and substantially reduced the amount of money that Hartmarx could borrow.

The company's banks reduced the committed line-of-credit and converted it to a debtor-in-possession loan for Hartmarx' use in bankruptcy. The D-I-P loan has very little additional that can be borrowed and expires on July 1, less than 90 days from now.

What finally pushed the company into bankruptcy was Wells Fargo's tightening of Hartmarx’s ability to borrow from its $200 million credit line against its receivables. In January, the bank informed Hartmarx that its credit line exceeded the receivables against which it could borrow by more than $7 million, leaving the company no funds to finance its day-to-day operations. After several months of negotiations, Hartmarx filed for Chapter 11 on Monday.

There's an article in today's New York Times which describes the situation...

http://www.nytimes.com/2009/05/12/bu...artmarx&st=cse

In the article it says...

"Seeing a political and public relations opening, the workers and their union are arguing that Wells Fargo, having received $25 billion in the bank bailout, should keep a 122-year-old American company like Hartmarx in business and preserve some 3,600 jobs."

"At a protest rally and meeting on Monday at the Hart Schaffner & Marx factory here, one Congressman made clear that saving Hartmarx was a personal crusade. Representative Phil Hare said that if Wells Fargo sold Hartmarx to a buyer that liquidated it, “I promise you I will be their worst nightmare.” At a news conference outside the plant, union leaders announced they would set up a nationwide toll-free number and clearinghouse that other union workers can contact if their plants were threatened with closing."

"Responding to the protests, Wells Fargo said that Hartmarx has been in default on the financing the bank has provided since the company filed for Chapter 11 bankruptcy protection. “Advancing more funds with no reasonable likelihood of being repaid is not consistent with sound banking.”

"To step up pressure on Wells Fargo, the workers have turned to powerful allies in Washington, most notably Barney Frank, chairman of the House Financial Services Committee, and Senator Charles E. Schumer of New York, where the Hickey Freeman plant, in Rochester, employs 800 workers. Employees are hoping that Mr. Obama, too, will pull some strings for them."

Oh, man. Does this administration have any idea the problems they've gotten themselves into? When they trampled on the creditors in the Chrysler bankruptcy, they opened the barn door for every other big union to claim the same rights as were given to the UAW...all paid for by us taxpayers, whether it makes economic sense or not.