Durbin to U.S. Treasury: Hartmarx Job Cuts Unnecessary; Firms Receiving Bailout Money Should Create Jobs, Not Cut Jobs
[WASHINGTON, D.C.] – In a letter to Treasury Secretary, Timothy Geithner, Assistant Senate Majority Leader Dick Durbin (D-IL) today expressed his belief that the loss of 3,500 jobs that would likely result from closing of Hartmarx is unnecessary and may encourage other financial institutions who have accepted taxpayer bailouts to liquidate valuable assets at companies rather than work to protect American jobs.
“I believe that the loss of 3,500 jobs that would likely result is unnecessary and runs counter to the Administration's stated goal of leveraging taxpayer-funded capital injections to encourage banks to lend,” wrote Durbin. “I ask that in your dealings with financial institutions that accept taxpayer funds that you reinforce the message that the taxpayers expect their money to be used to lubricate the economy, not liquidate it.”
Hartmarx, which got its start as a men’s clothing store in Chicago, has provided clothing to Americans for more than 120 years. The company employs more than 1,000 at its plants in Des Plaines and Rock Island and at a warehouse in Michigan City, Ind., and employs 3,500 in total. After filing for Chapter 11 bankruptcy protection in January, Hartmarx chose a bid from a potential buyer that would allow the company to continue to operate. However, Wells Fargo, the company's largest secured creditor, may be pursuing the liquidation of the company despite having received $25 billion in Troubled Asset Relief Program (TARP) funding.
[text of the letter below]
The Honorable Tim Geithner
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
May 12, 2009
Dear Treasury Secretary Geithner,
I write to express my concern regarding an Illinois-based company that is under threat of liquidation by its primary lender, even as that lender has reduced the threat of its own liquidation by accepting taxpayer funds.
Hartmarx, based in Illinois and New York, has provided clothing to Americans for more than 120 years. The company has struggled during the economic downturn and is now operating in Chapter 11 bankruptcy. Hartmarx has chosen a bid from a potential buyer that would allow the company to continue to operate and would allow most of the employees to remain with the company. However, we understand that Wells Fargo, as the company's largest secured creditor, may still be pursuing the liquidation of the company.
I believe that the loss of 3,500 jobs that would likely result is unnecessary and runs counter to the Administration's stated goal of leveraging taxpayer-funded capital injections to encourage banks to lend. I fear that this precedent, if set, would encourage other financial institutions who have accepted taxpayer bailouts to search for opportunities to liquidate valuable assets at companies that otherwise would provide good-paying jobs throughout America.
I ask that in your dealings with financial institutions that accept taxpayer funds that you reinforce the message that the taxpayers expect their money to be used to lubricate the economy, not liquidate it.
Sincerely,