Ever notice President Barack Obama’s tailored suits? A lot of people have admired their stylish high quality. The company that makes some of them is Hart Schaffner Marx in Mr. Obama's hometown, Chicago. Chicagoans just call it Hartmarx. It’s been around for 120 years and is the largest men’s suit company still operating in the country.
Well, recently the recession caught up with Hartmarx. Hoping to save itself by restructuring, in January it filed for Chapter 11 bankruptcy. Wells Fargo, the company’s biggest creditor, was said to be considering selling Hartmarx to a company that would liquidate it, even though there were at least two other prospective buyers who wanted to keep the company running.
Union workers at Hartmarx are furious that Wells Fargo would even consider selling the iconic, hometown company to a company that would shut it down. The union and even the state of Illinois are pushing back against Wells Fargo. State treasurer Alexi Giannoulias fired off a letter to Wells Fargo CEO John Stumpf, threatening to take its $8 billion portfolio away from Wells Fargo if the bank backs putting Hartmarx out of business.
Giannoulias is outraged that Wells Fargo got $25 billion in federal TARP bailout money and now might put people out of work. Giannoulias says Wells Fargo has an obligation to use TARP funds to preserve American jobs, not shut down U.S. companies. I spoke with Giannoulias about his hardball tactics against Wells Fargo.
Wells Fargo issued the following statement: "We empathize with the employees and communities affected by decisions made by Hartmarx. However, these are internal business matters that Hartmarx is deciding on, as Hartmarx explores its options in the bankruptcy process. Beyond that, we cannot comment further because our customer relationships are confidential. We work with our commercial customers who experience financial difficulties whenever circumstances prudently permit it. We want them to stay in business so we can earn all of their business and help them succeed financially."
Giannoulias says he’s planning to talk to Wells Fargo this weekend. We will follow up with any new developments on the story. What do you think? Post your comments below.