Worker Co-op New Era Windows Opens For Business

From sit-down strikes to state subsidies
Posted by: 
Dave Zuckerman
Photo courtesy of Brendan Martin/The Working World

Last week, the New Era Windows cooperative celebrated its opening in a former Campbell’s Soup building in Chicago, the culmination of a hard-fought struggle by workers to save their livelihoods. Their well-documented struggle began in 2008 when the workers of Republic Windows and Doors occupied the factory to keep it from closing, attracting national attention. Then again in 2012, a group of workers occupied the factory, after Serious Materials had bought and hired back the workers but ultimately failed to reinvigorate the company and determined to liquidate it for good. This time, the workers, with the help and support of the United Electrical Workers (UE), negotiated with the owners to buy the plant equipment and form a worker-owned cooperative. The New York-based cooperative financial institution The Working World financed the purchase and the Center for Workplace Democracy has helped train the new owners last summer by providing them business management classes at the UE's union hall.

Now just 18 worker owners, New Era Windows is located seven miles down the road from its original location on Goose Island. The move has cut rents costs significantly and positioned the new business positively under budget. Another 20 workers are intending to buy in after the company begins operations. Ultimately, New Era will likely employ 40 to 80 people. Making decisions collectively and having worked in the business for anywhere between 10 and 30 years, the new owners know the ins-and-outs of running a window factory and are banking on that experience to help them navigate their new roles.

This is a great story and current indications are that New Era will continue its upward climb. (Brendan Martin, the president and founder of The Working World, “has seen few co-ops or businesses as promising as New Era.) By democratizing the workplace through shared ownership, worker-owned cooperatives help anchor jobs and wealth in communities and more evenly distribute profits among workers. Although the vast majority of cooperative businesses in the United States are consumer owned (92% according to a study by the University of Wisconsin), there are over 300 worker-owned cooperative businesses that generate at least $219 million in revenue — and that number is growing. YES! Magazine’s Spring 2013 issue is dedicated completely to cooperatives and their increasing presence, crediting them with driving a new economic model that is more equitable and more concerned with the well-being of people and communities than with profits.

One way to help the expansion of worker-owned businesses would be if state and local governments targeted their grants and tax incentives to assist their development instead of large corporations that have little interest in the long-term vitality of the community. Writing in the New York Times yesterday, Dr. Nancy Folbre, an economics professor at the UMass, Amherst, explored just this idea. Local and state governments disperse as much as $70 to $80 BILLION a year in financial incentives to attract businesses to their localities. As Dr. Folbre pointed out, to date, the bias has been to direct these subsidies to large corporations, despite them being less rooted in the community and creating an unfair playing field for small and local businesses. These more mobile corporations effectively pit local and state governments against each in a race to the bottom as they scramble to attract whoever they can. In fact, New Era’s predecessor Republic Windows received a $10 million TIF subsidy and faced no penalties despite not upholding its pledge to keep some 600 workers on its payroll through 2019.

These subsidies are not going away and could be more effectively directed and leveraged for helping small and local businesses grow, especially those that are worker owned. Several weeks ago, on April 24, Ted Howard, Executive Director for The Democracy Collaborative, had the opportunity to present testimony before the Illinois Governor's Task Force on Social Innovation, Entrepreneurship, and Enterprise. The focus was on a set of actionable policy recommendations that would position Illinois as a leader among states in community wealth building. Several of those recommendations focused on how to more effectively leverage state and local resources to promote worker ownership.

Worker ownership, alone, is not a panacea for revitalizing struggling communities. However, it is a critical piece for creating more equitable and vibrant communities in which resources are again anchored and in which the race-to-the-bottom ethos of the modern corporation can begin to be contained.