With a "We're mad as hell and we're not going to take it anymore" attitude, a coalition of labor, religious and civic leaders is calling on Pittsburgh-area residents to withdraw their money from Mellon Bank to protest the bank's foreclosure of a local steel mill equipment supplier and its overseas lending policies.
Leaders of the protest claim that they have pledges of $40 million in withdrawals from the bank, which is the largest in Pennsylvania and 12th biggest in the nation, with assets of about $25 billion.
The protesters hope ultimately to persuade depositors with about $125 million in the bank to withdraw their funds, including the City of Pittsburgh, which hasx about $35 million in the bank. County and state governments are considering similar actions.
The grassroots movement gained steam last week when Lloyd McBride, president of the United Steel Workers union, sent letters to 180,000 union members and retirees in western Pennsylvania saying that the union was asking its 499 locals to withdraw their funds from the bank. The letter subtly suggested that members and retirees do the same.
"We intend to fight every step of the way for our jobs," said Ron Weisen, president of United Steel Workers union local 1397 in neighboring Homestead, one of the leaders of the protest.
A bank spokesman called the protest "an unfortunate situation," and said that it was likely to do more damage to the bank's image than to its financial situation. "We'd hate to lose any customers," said a spokeswoman. The bank says it has no idea how much money has actually been withdrawn because of the protest.
In this battered heartland of the steel industry, where unemployment has been running at more than 16 percent, the final straw was the shutdown of the Mesta Machine Co., a West Homestead-based manufacturer of steel mill equipment.
Mellon and two other Pittsburgh banks foreclosed on $20 million worth of loans to Mesta on Feb. 9 and a few hours later the company filed for bankruptcy protection. That action froze Mesta's bank accounts, locking up the company's payroll, including $250,000 in wages owed to hourly employes and $180,000 owed salaried workers.
The protesters claim that the 1,200 employes who lost their jobs when Mesta shut down are due back pay, and are calling on the bank, at the least, to unfreeze the accounts.
"Our position is that working people are at the end of the line when a bankruptcy happens," said United Steel Workers spokesman Russell Gibbons. "They take care of the notes and investors and everything, but don't care about the guy who works at the place."
The Mellon bank said today it will support a petition by Mesta asking the bankrupcty court to release the final wage payments. "We're very supportive of this effort to get their money back," the bank said in a statement.
But the confrontation has unlocked much deeper resentment over the plight of this depressed region and the forces that many residents blame for their troubles--with banks and American industry's foreign competitors high on the list.
Weisen and other leaders of the Mellon boycott say their complaints go far beyond the bank's treatment of Mesta's payroll account. The protesters are demanding that Mellon and other institutions make financial commitments to revive not only Mesta but the entire industrial Monongahela River valley area around Pittsburgh.
Further, the protesters want Mellon to stop lending money to foreign competitors of the steel industry. "We're really pushing the Mellon Bank because they're really pushing money abroad," Weisen said.
The Denomination Mission Strategy, a union-clergy group, contends Mellon loaned "tens of millions" of dollars to a Japanese company that makes mill machinery similar to Mesta's products, a claim the bank would not comment on.
Mellon has about $5.5 billion--some 20 percent of its $25 billion assets--in loans to foreign firms of overseas units of U.S. companies, said Barry Deutsch, the bank's senior vice president.
In addition to the withdrawals from the bank, the protesters have also held a demonstration outside Mellon's Homestead branch and plan to demonstrate Wednesday outside the bankruptcy court.
"Mellon Bank is sitting back hoping this will all blow over," Weisen said. "No way."