Page last updated at 10:27 GMT, Tuesday, 9 December 2008

State threatens Bank of America

Rod Blagojevich at the Republic Windows and Doors factory
Take some of that federal tax money that they've received and invest it by providing the necessary credit to this company so these workers can keep their jobs
Governor Rod Blagojevich

The governor of Illinois has threatened to stop doing business with Bank of America if it does not help laid-off workers occupying a Chicago factory.

Rod Blagojevich said the bank would lose out on hundreds of millions of dollars in fees and commission.

About 200 workers have been occupying Republic Windows and Doors demanding severance pay since they were laid off with only three days notice.

Their employer blames Bank of America for cutting off their credit line.

The bank said it was "reaching out to the management and ownership of the company to see what they can do to help resolve the issue".

It added that it had provided the maximum amount of funding it could under the terms of its agreement with the company.

Plan rejected

Workers said they were entitled to be given 60 days notice of the closure of the plant and demanded pay for that period as well as any unused vacation time.

Workers at Republic Windows and Doors
About 200 of the 240 laid-off workers have been occupying the plant

Republic Windows and Doors was a victim of the collapse in housebuilding in the US.

It said it had given its bankers a plan for an orderly wind-down that would have led to an end to production in January 2009.

But it said that the bank had rejected permission to give vacation pay to its employees.

It told workers last week that Bank of America had shut off its line of credit and refused to allow further expenditures.

Obama comments

Mr Blagojevich said it was time for Bank of America to spend some of its $15bn (10bn) bail-out money.

"Take some of that federal tax money that they've received and invest it by providing the necessary credit to this company so these workers can keep their jobs," he said.

President-elect Barack Obama also expressed support for the workers occupying the plant and agreed that the money given to banks needs to benefit the rest of the economy.

"It's also important for us to make sure that the plans and programs that we design aren't just targeted at maintaining the solvency of banks, but they're designed also to get money out the door and to help people on Main Street," Mr Obama said.

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