Unions Shut Down Hostess

[Phatscotty]

so your main hang up was that the CEO only made 1$ until december 31st? I'm not sure how fair it is, but I am sure it's a start.

NO scotty that is not my hang up. My hang up is how long will the employees have to endure the pay cuts, increase in health insurance payments and decrease in the pension contributions. Rayburn has other income to make up for his pay cut the employees don't.

I don't know. Hopefully they would negotiate some kind of short term plan where if it works they will get some or all of their paycut back. And on health insurance....everyone's insurance is going up, so they should probably do what the rest of us have to do. I'm unaware of pension decreases (other than the straight loss of pension/plug pulled on their pension when Hostess goes belly up). What are the pension decreases?

I'm sure Rayburn does have other income. That does not change that he sacrificed hundreds of thousands of dollars that Hostess did not have to pay him and likewise allowed Hostess to remain functional for a while longer. You can't take that away from him. If you have to minimize it, fine. It also doesn't change what the employees did, which is nothing. They could have maybe took the 5% paycut, until Decembr 31st? That would buy more time



When I was in the union, I believed in the team concept. Everyone has to have some skin in the game, because everyone has skin in the outcome IE unemployed

[muy_thaiguy]

For most of my life, I had bought Homepride brand bread. When I went to the grocery store to get more, they don't have any. I have come to find out that Homepride was owned and operated by Hostess.

Somehow, someway, this is all Army of God's fault.

[oss spy]

Wow. It's hard to believe that a company would shut down when it can't sustain itself and its workers go on strike after it attempts to make necessary pay cuts.

[spurgistan]

Wow. It's hard to believe that a company would shut down when it can't sustain itself and its workers go on strike after it attempts to make necessary pay cuts.

Wow. It's hard to believe that a company would award its executives raises for a job horribly done, then try to leverage workers into lower wages citing said horrible job by executives. Oh, no, wait, that's how the economy works now.

[Evil Semp]

Wow. It's hard to believe that a company would shut down when it can't sustain itself and its workers go on strike after it attempts to make necessary pay cuts.

Wow. It's hard to believe that a company would award its executives raises for a job horribly done, then try to leverage workers into lower wages citing said horrible job by executives. Oh, no, wait, that's how the economy works now.

+1

[thegreekdog]

Wow. It's hard to believe that a company would shut down when it can't sustain itself and its workers go on strike after it attempts to make necessary pay cuts.

Wow. It's hard to believe that a company would award its executives raises for a job horribly done, then try to leverage workers into lower wages citing said horrible job by executives. Oh, no, wait, that's how the economy works now.

Yeah, I don't really understand why people would take the side of the executives unless they are executives themselves.

[stahrgazer]

What I'd like to know is if the dude who worked for a $1 salary gained compensatory benefits like company stocks? If so, he probably would've made out really well if the company held together, especially considering he'd pay less taxes on stock distribution income than salary income. And, even if the company does belly-up, when they sell assets, stockholders will usually get some of that revenue.

Basically I'm wondering if what this CEO did was designed to look good but really didn't cut him much; or whether he really was trying to "take one for the team."

Regardless, I think the employees' union should've agreed to the 5% salary cut but perhaps ask for some of that back in company stocks for the employees.

[Nola_Lifer]

Wow. It's hard to believe that a company would shut down when it can't sustain itself and its workers go on strike after it attempts to make necessary pay cuts.

Wow. It's hard to believe that a company would award its executives raises for a job horribly done, then try to leverage workers into lower wages citing said horrible job by executives. Oh, no, wait, that's how the economy works now.

Sounds like what our legislator do too.

[stahrgazer]

Sounds like what our legislator do too.

Yup, they sure do.

[notyou2]

Is it possible that either the bank or an outside interest takes control and the employees are called back?

[Nola_Lifer]

Is it possible that either the bank or an outside interest takes control and the employees are called back?

PBR owners were reported to buy it but they didn't bite.

[stahrgazer]

Is it possible that either the bank or an outside interest takes control and the employees are called back?

According to the news yesterday, they've had at least 6 interested parties, some of whom would be willing to bring back union'd employees

[Phatscotty]

Killing the goose that lays the golden egg is one of those old fairy tales for children which has a heavy message that a lot of adults should listen to. The labor unions which have driven the makers of Twinkies into bankruptcy, potentially destroying 18,500 jobs, could have learned a lot from that old children's fairy tale.

Many people think of labor unions as organizations to benefit workers, and think of employers who are opposed to unions as just people who don't want to pay their employees more money. But some employers have made it a point to pay their employees more than the union wages, just to keep them from joining a union.

Why would they do that, if it is just a question of not wanting to pay union wages? The Twinkies bankruptcy is a classic example of costs created by labor unions that are not confined to paychecks.

The work rules imposed in union contracts required the company that makes Twinkies, which also makes Wonder Bread, to deliver these two products to stores in separate trucks. Moreover, truck drivers were not allowed to load either of these products into their trucks. And the people who did load Twinkies into trucks were not allowed to load Wonder Bread, and vice versa.

All of this was obviously intended to create more jobs for the unions' members. But the needless additional costs that these make-work rules created ended up driving the company into bankruptcy, which can cost 18,500 jobs. The union is killing the goose that laid the golden egg.

Not only are there reasons for employers to pay their workers enough to keep them from joining unions, there are reasons why workers in the private sector have increasingly voted against joining unions. They have seen unions driving jobs away to non-union competitors at home or driving them overseas, whether with costly work rules or in other ways.

The old-time legendary labor leader John L. Lewis called so many strikes in the coal mines that many people switched to using oil instead, because they couldn't depend on coal deliveries. A professor of labor economics at the University of Chicago called John L. Lewis "the world's greatest oil salesman."

There is no question that Lewis' United Mine Workers Union raised the pay and other benefits for coal miners. But the higher costs of producing coal not only led many consumers to switch to oil, these costs also led coal companies to substitute machinery for labor, reducing the number of miners.

By the 1960s, many coal-mining towns were almost ghost towns. But few people connected the dots back to the glory years of John L. Lewis. The United Mine Workers Union did not kill the goose that laid the golden eggs, but it created a situation where fewer of those golden eggs reached the miners.

It was much the same story in the automobile industry and the steel industry, where large pensions and costly work rules drove up the prices of finished products and drove down the number of jobs. There is a reason why there was a major decline in the proportion of private sector employees who joined unions. It was not just the number of union workers who ended up losing their jobs. Other workers saw the handwriting on the wall and refused to join unions.

There is also a reason why labor unions are flourishing among people who work for government. No matter how much these public sector unions drive up costs, government agencies do not go out of business. They simply go back to the taxpayers for more money.

Consumers in the private sector have the option of buying products and services from competing, non-union companies-- from Toyota instead of General Motors, for example, even though most Toyotas sold in America are made in America. Consumers of other products can buy things made in non-union factories overseas.

But government agencies are monopolies. You cannot get your Social Security checks from anywhere except the Social Security Administration or your driver's license from anywhere but the DMV.

Is it surprising that government employees have seen their pay go up, even during the downturn, and their pensions rise to levels undreamed of in the private sector? None of this will kill the goose that lays the golden egg, so long as there are both current taxpayers and future taxpayers to pay off debts passed on to them.

[PLAYER57832]

Wow. It's hard to believe that a company would shut down when it can't sustain itself and its workers go on strike after it attempts to make necessary pay cuts.

Wow. It's hard to believe that a company would award its executives raises for a job horribly done, then try to leverage workers into lower wages citing said horrible job by executives. Oh, no, wait, that's how the economy works now.

+1

Yeah.. and not to mention that the product they sell is extremely unhealthy and never been truly updated to meet today's standards.

But.. the brand will be sold to satisfy the nitche market, meanwhile, the owners/executives have enough in their bank accounts to rest easy/retire for quite some time. The workers.. those poor slobs really should have gone to college. Totally their own fault. No reason they should expect anything more than whatever pittance the owners wish to provide.... just like most every other company in the US. But hey.. manufacturing isn't really dead. There are always robots.
sarcasm, in case anyone missed the point....

[Phatscotty]

Obviously, the CEO is the problem here [sarcasm]

The work rules imposed in union contracts required the company that makes Twinkies, which also makes Wonder Bread, to deliver these two products to stores in separate trucks. Moreover, truck drivers were not allowed to load either of these products into their trucks. And the people who did load Twinkies into trucks were not allowed to load Wonder Bread, and vice versa.

multiply the trucks (did you know it costs $8,000 to wrap/paint a truck with the Wonder or Hostess logo?), the fuel (diesel), the maintenance and constant upkeep of the trucks (oil changes, flat tires, head gaskets transmissions and engine replacements), the commercial insurance on the trucks, the permits required by cities to operate on their roads, the virtual double wages paid for 2 employees to do the same job that 1 employee can and should be doing, meaning double healthcare and double benefit packages (bereavement pay etc) by 6,500.....makes CEO pay look like chump change....

even when CEO pay is not 1$