State official threatens bank in suitmaker's bankruptcy

Illinois State Treasurer Alexi Giannoulias, surrounded by dozens of workers at the Hart Schaffner & Marx manufacturing plant in Des Plaines Thursday morning, threatened Wells Fargo Bank would lose state contracts if the lender does not keep the suitmaker's factory open.

The Chicago-based maker of high-end men's suits, including President Obama's inauguration tuxedo, is undergoing a reorganization after filing for Chapter 11 bankruptcy in January. The company's primary lender, Wells Fargo, has been pushing for a liquidation, as have other lenders.

Giannoulias criticized Wells Fargo for accepting $25 billion in Troubled Asset Relief Program (TARP) funds, the federal government-backed bailout money, and not letting it trickle down to struggling businesses like Hartmarx.

"What we expect and we demand is that companies that get state and federal taxpayer dollars to do the right thing ... to invest in Illinois, in American companies, in American workers," Giannoulias said. "That needs to happen immediately."

Giannoulias said the state has a good relationship with Wells Fargo, which handles a number of its contracts.

(But) "We have sent a strong message that unless they do everything they can, unless this company (Hartmarx) remains open, they will not be doing business with the state of Illinois," Giannoulias said.

"What we have here is symbolic of what's going on across the country."

The state of Illinois has deposits with about 250 Illinois banks, but Wells Fargo is its primary banker.

"Wells Fargo serves as the custodian for the state's $8 billion portfolio," said Scott Burnham, treasurer's office spokesman. The money is used for short-term investments, he said.

In a statement released Thursday that did not address Giannoulias's threat, Wells Fargo officials said the company works with its commercial customers experiencing financial difficulties whenever prudent.

"We want them to stay in business so we can earn all of their business and help them succeed financially," spokeswoman Jessica Walstrom said in the 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," the statement added.

Hartmarx Corp., a 122-year-old company, had about $261 million in debt as of Oct. 9 and could be shuttered, making roughly 1,000 people in Illinois and Indiana jobless.

The company operates manufacturing plants in Des Plaines and Rock Island as well as a warehouse in Indiana, and has facilities employing roughly 3,500 people nationwide.

More than 500 workers from Hartmarx's Des Plaines plant signed a large poster that is making its way to President Barack Obama reading: "Our jobs are worth saving, Mr. President."

<div class="infoBox"> <h1>More Coverage</h1> <div class="infoBoxContent"> <div class="infoArea"> <h2>Video</h2> <ul class="video"> <li><a href="/multimedia/?category=9&type=video&item=342">Protest at Des Plaines business</a></li> </ul> <h2>Stories</h2> <ul class="links"> <li><a href="/story/?id=291557">Suitmaker's employees take plea to president <span class="date">[05/06/09]</span></a></li> </ul> <h2>Related documents</h2> <ul class="morePdf"> <li><a href="/pdf/wellsfargo.pdf">Letter from State Treasurer Alexi Giannoulias to Wells Fargo</a></li> <li><a href="/pdf/obamahsm.pdf">Obama: A fashion role model </a></li> </ul> <h2>Related links</h2> <ul class="moreWeb"> <li><a href="http://www.hartmarx.com/history.htm">Company history </a></li> </ul> </div> </div> </div>