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Watching jobs fritter away
Published on November 21, 2012 By terpfan1980 In Politics

Let me start here by saying I am not a member of the bakers union, have never worked for Hostess, and really don't have any inside information and only a little of the history of the situation, but I find myself completely mystified by the lack of ability for the union(s) that are involved with Hostess, and the company itself, to find a solution to the problems the company is having.

Yet again it seems that the union is dead set on watching their members lose their jobs rather than giving in on the concessions that the company is telling them they need.  Where I have seen this played out before?  Oh, I go back a ways, so I could reach back in the mental files and think about Eastern Airlines and their demise.  Yes, they had one of the worst CEOs ever to run a company (though I know some that would give him a run for the money), but when the company told the union workers that they had to accept the cuts that were promised or watch everyone lose their job, they meant it.  The union told the employees to stay firm, hang on, the company would come crawling back to them.  Uh, yeah, and when's the last time that approach has worked?

The same sort of scenario seems to be playing out here.  Better to not work at all, rather than suffer the cuts that the company would impose upon the union membership.  Really?

Perhaps it is, and perhaps I should have filed this article under one of my favored categories - politics.  Perhaps those union workers are assured that they'll get to collect 99 weeks worth of unemployment while they sit back and wait for the economy to get better.  They'll have free health care compliments of Obamacare.  What's not to like for them?

These are the sorts of results one can expect when we make things too easy and remove the incentives for working hard in this country.  While I'd like to see everyone paid fair wages for the work they do, and I dislike the idea of greedy CEOs and company management getting fat on the backs of the workers that they employ/manage, I really don't think Hostess brands has been making their management and stockholders fat and happy (actually, the baked goods might be making customers fat, but that is an article for another day).  They are trying to emerge from bankruptcy.  They have no profits to speak of and things don't look to be getting any better for them any time soon.

I wish I could say that the bakers union and Hostess would reach some agreement here, but it appears to be a lost cause.  Instead, the union membership will lose their jobs at Hostess.  Someone will come in and buy up the assets that Hostess has/had, and some of those former employees may find themselves getting jobs at whomever picks up the pieces.  They might even find themselves getting compensation that would come within striking distance (no pun intended here) of the offer(s) they've gotten from management at their current employer.  Too bad they likely won't ask themselves how they are better off with their new bosses and new employers than they were in working under a contract they deemed too unfavorable.


Comments (Page 1)
on Nov 21, 2012

They had already hired liquidation experts to run the company - it was going regardless of the concessions.

What they were looking to do is get the salaries and pensions changed so that their assets would look better in a sale.

The savings from the previous payroll cuts were not used to reinvest into new equipment.  Why would it be this time?  Fool me once, shame on you.  Fool me twice, shame on me.

on Nov 21, 2012

Our former Governor disbanded all Unions in State Government here years ago .... a very wise move as most Unions live up to the "U" in the name, absolutely USELESS.

 

I do feel sorry for the workers here though, tough to lose your job. Personally I would have made concessions to keep the company going and keep my job in these tough economic times.

on Nov 21, 2012

Correct, because with each change of management, valuable assets were sold off.

Pitifully poor management was the problem, not the union... this time.

Unions can be destructive and self serving... my dad's newspaper closed because of Bertrand Powers and the Printer's Union... I'll hate that man forever. But this time with Hostess? Not buying "the union's guilty" theory.

on Nov 21, 2012

The union bosses won't lose their 'jobs', whether management or labor was the more to blame.  But the intransigence of both was enough for the mediator to say 'effit, liquidate' & offshore some more jobs.

on Nov 21, 2012

Yeah, they still have places overseas... maybe they will start exporting to the US, be a wise business decision for sure!

 

http://worldnews.nbcnews.com/_news/2012/11/21/15307788-despite-us-woes-twinkies-reign-supreme-on-the-nile?lite

on Nov 21, 2012

DrJBHL
Correct, because with each change of management, valuable assets were sold off.

Pitifully poor management was the problem, not the union... this time.

Unions can be destructive and self serving... my dad's newspaper closed because of Bertrand Powers and the Printer's Union... I'll hate that man forever. But this time with Hostess? Not buying "the union's guilty" theory.

 

The management was doing their job, which was to make their bosses money.  The problem is that the incentive was there to liquidate the business over making it profitable- just like what Bain Capital does.

 

Vulture Capitalism of this sort is not good for society. 

 

Note: I'm not opposed to capitalism of the sort Brad practices, which is about growing a business and creating.  It's the capitalism of destruction that I have problems with.

 

As for the unions: why should they negotiate in times like these?  They'd be offer off having the company liquidated and the demand causing a new business to rise up instead.

 

on Nov 21, 2012

DrJBHL
Correct, because with each change of management, valuable assets were sold off.

Pitifully poor management was the problem, not the union... this time.
...But this time with Hostess? Not buying "the union's guilty" theory.

From what I have gather from the situation it is this. 

I come from an area where unions are highly favored, it is a very rural coal mining area of the US. So my opinion on unions may be biased from my historical and cultural background. 

 

Alstein

Quoting DrJBHL, reply 3Correct, because with each change of management, valuable assets were sold off.

Pitifully poor management was the problem, not the union... this time.

Unions can be destructive and self serving... my dad's newspaper closed because of Bertrand Powers and the Printer's Union... I'll hate that man forever. But this time with Hostess? Not buying "the union's guilty" theory.


The management was doing their job, which was to make their bosses money.  The problem is that the incentive was there to liquidate the business over making it profitable- just like what Bain Capital does.
 
Vulture Capitalism of this sort is not good for society. 

Note: I'm not opposed to capitalism of the sort Brad practices, which is about growing a business and creating.  It's the capitalism of destruction that I have problems with.
As for the unions: why should they negotiate in times like these?  They'd be offer off having the company liquidated and the demand causing a new business to rise up instead.

 

 

I also strongly agree with this. Having the incentives on just selling out the business to rake in the cash instead of working to make the business profitable again is a dangerous concept. 

on Nov 21, 2012

I heard on the Tonight Show that Suzie Q is now working as a Ho Ho.

on Nov 21, 2012

AlStein, vultures perform a necessary function... with companies? Some really need to be reorganized under bankruptcy protection, while others just need to go. Hostess had very little going for it after all the assets being sold off. A sad commentary on the management of that company, once a tremendously successful one.

on Nov 21, 2012

The problem was, not all the Ding-Dongs involved were baked and covered with chocolate. 

"Hey, where's the cream filling?"  

on Nov 21, 2012

The employees had already made big concessions in just a few years. While executives take raises and gifts. They even tried to pull a fast one on the courts by pumping up executive compensation directly before heading to bankruptcy court. Management was rotten. And sales have been flat or declining for years. Consumers are trending healthier and wiser. This is witnessed across the board. Hostess failed to meet demand. Then there is the sugar cartel. These are the real bad guys here. Research them. Rather than fight the sugar lobbyists, and rather than shave points off executive and share holder compensation, Hostess tried twice too many times to cut labor pay. Hostess wasn't the first, and won't be the last. The change it comes regardless our own desire. Our systems evolve. Buckle up folks.

on Nov 21, 2012

It all depends on what the job market for bakers is.  Yes, the overall unemployment rate is high, but it varies a lot by profession.  Perhaps it's easy for bakers to find new jobs, in which case the bakers are right to hold their ground.  If your profession is in high demand, losing your job is only a brief annoyance, and much preferable to accepting compensation below industry norms.

 

on Nov 21, 2012

Since Hostess is/was such a huge company, this would seem to provide an opportunity for smaller, more regional bakeries to start up or expand.  That might actually be kind of nice for a change.

on Nov 21, 2012

"Perhaps it is, and perhaps I should have filed this article under one of my favored categories - politics. "

Yes.

on Nov 21, 2012

DaveRI
Since Hostess is/was such a huge company, this would seem to provide an opportunity for smaller, more regional bakeries to start up or expand.  That might actually be kind of nice for a change.
Yes this ^ !!!

We move past the mono-blocs. Too much money gets exported out of local and regional economies never to return. Too few hands take far to much. The least painful route to repair our economy is gonna be a return to mom and pop shops. It is really quite obvious when we look at it. Money needs to cycle through communities, far more than it does now.  

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