Taking the occupation in shifts, the workers played cards and dominoes, napped on broken-down boxes, and watched on portable televisions as then-President-elect Obama proclaimed his support. Restaurants donated food; sympathizers, toys for the children. The Rev. Jesse Jackson sent a truckload of turkeys. Outside, camera crews -- denied access to this steel-frame structure on Chicago's Near North Side -- massed around Teamsters hoisting protest signs. The inevitable giant inflatable rat loomed gray against the snowdrifts.
Two thousand miles away, Surace watched the story unfold and mulled whether Republic was an opportunity, a can of worms, or both. He had ample experience acquiring businesses, one or two out of bankruptcy. But Republic was no mere particle of economic fallout. According to union members and others, the company's CEO, Richard Gillman, had for months been stripping the Chicago factory of equipment and trucking it to a new, nonunion plant he was secretly setting up in Iowa. (In September, Gillman was charged with looting Republic and defrauding creditors. He denies the charges.)
"The workers were up in arms," says Surace. "The equipment had been pillaged. The computers were destroyed. The customers didn't want to buy. The records weren't accurate. There was no management team. No one but the craziest person on earth would take over that." He dismissed the idea from his mind.
But at the Serious Materials holiday party a week later, Porat urged Surace to reconsider. "Think what can happen!" Porat argued. "We're creating green-collar jobs. We're creating an energy-efficient product. We're hitting climate change. And it's Chicago! It's 10 minutes away from Valerie Jarrett's house! It will come to the White House's attention. It's a perfect expression of their policy. They will love you, Kevin. They will love you."
Surace says he doesn't much care whether the White House loves him, but he certainly wants people in power to know and respect Serious Materials. After penciling out the numbers and performing as much due diligence as possible, he pitched the Serious Materials board on the advantages -- and the public relations potential -- of owning one of the largest window-glass facilities in the country, with a seasoned work force and a fabulous location. Go ahead, responded the board.
Right after Christmas, Surace flew to Chicago and met with Carl Rosen, president of the Western Region of the United Electrical, Radio, and Machine Workers of America, and several workers from the plant. Rosen calls Surace's approach "a little unusual." In most cases, says Rosen, a prospective buyer will contact the union only after he has talked to someone who has the legal authority to sell. "Kevin came directly to us, because he understood the importance of the skilled work force to making this work," Rosen says. The parties agreed that Serious Materials would run a union shop, bring back employees at their old salaries, and recognize workers' seniority.
Only then did Surace approach Bank of America, Republic's chief lender. "I said to them, 'You just took $20 billion from the Feds. Give us the thing for $1 and look like heroes.' " When that didn't fly, Surace laid out an offer of several million dollars -- and a deadline of two weeks. "One minute after the deadline, we sent a new offer that was half the price of the old offer and gave them 24 hours to accept that," says Surace. That deadline passed as well. Unperturbed, Surace took another approach: He went to General Electric and paid $900,000 for the lease on Republic's manufacturing equipment. With the equipment and a collective bargaining agreement in hand, he obtained the remaining assets from the bank -- chiefly computers and software -- for just $500,000. (He later arranged a lease with Wm. Wrigley Jr. Company, owner of the building.) "It was a very creative negotiation," says Surace.
The Republic rescue has paid off handsomely in publicity, just as Porat predicted. Aspiring vendors, curious dealers, and assorted well-wishers began stopping by the plant after its reopening. These days, salespeople rarely need to introduce Serious Materials to their prospects; the White House has already done that for them. Still, says Surace, "If I'd had my druthers, I'd have preferred to do [the Biden event] when we had 100 workers back in. The administration wanted to do it sooner, and I understand that. But it raises expectations that we're going to be hiring like crazy."
The timing was poor for a different reason in March, when the White House contacted Serious Materials about participating in a different event. Shortly after the Republic Windows deal closed, Surace received a note announcing a press conference to promote the stimulus bill's effect on funding for clean tech. Would he be willing to attend and introduce the President? Anyone who questions whether Surace is motivated by celebrity should note his response: He said no. He had another commitment -- a dress rehearsal of Thoroughly Modern Millie at St. Lawrence Academy in Santa Clara, where he serves as musical director for the school's theater program. "Unless I'm on my deathbed," he says, "if I've signed up to be somewhere, that's where I'll be." Foundation Capital's Holland went in his place.
But Surace has no regrets. "I would love to meet the President," he says. "And doing what we're doing, I'm sure there will be many more chances."
