Unions Shut Down Hostess

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Re: Unions Shut Down Hostess

Postby Phatscotty on Fri Nov 23, 2012 9:28 pm

Evil Semp wrote:
Phatscotty wrote: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
Last edited by Phatscotty on Fri Nov 23, 2012 11:43 pm, edited 1 time in total.
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Re: Unions Shut Down Hostess

Postby muy_thaiguy on Fri Nov 23, 2012 9:31 pm

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.

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Re: Unions Shut Down Hostess

Postby oss spy on Sat Nov 24, 2012 6:05 pm

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.
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Re: Unions Shut Down Hostess

Postby spurgistan on Sat Nov 24, 2012 7:09 pm

oss spy wrote: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.
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Re: Unions Shut Down Hostess

Postby Evil Semp on Sat Nov 24, 2012 7:22 pm

spurgistan wrote:
oss spy wrote: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
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Re: Unions Shut Down Hostess

Postby thegreekdog on Sat Nov 24, 2012 8:37 pm

spurgistan wrote:
oss spy wrote: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.
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Re: Unions Shut Down Hostess

Postby stahrgazer on Sat Nov 24, 2012 8:51 pm

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.
Last edited by stahrgazer on Sat Nov 24, 2012 8:54 pm, edited 1 time in total.
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Re: Unions Shut Down Hostess

Postby Nola_Lifer on Sat Nov 24, 2012 8:51 pm

spurgistan wrote:
oss spy wrote: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.
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Re: Unions Shut Down Hostess

Postby stahrgazer on Sat Nov 24, 2012 8:56 pm

Nola_Lifer wrote:Sounds like what our legislator do too.

Yup, they sure do.
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Re: Unions Shut Down Hostess

Postby notyou2 on Sat Nov 24, 2012 10:00 pm

Is it possible that either the bank or an outside interest takes control and the employees are called back?
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Re: Unions Shut Down Hostess

Postby Nola_Lifer on Sat Nov 24, 2012 11:10 pm

notyou2 wrote: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.
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Re: Unions Shut Down Hostess

Postby stahrgazer on Sat Nov 24, 2012 11:27 pm

notyou2 wrote: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
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Re: Unions Shut Down Hostess

Postby Phatscotty on Mon Nov 26, 2012 1:12 am

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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.
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Re: Unions Shut Down Hostess

Postby PLAYER57832 on Mon Nov 26, 2012 8:02 pm

Evil Semp wrote:
spurgistan wrote:
oss spy wrote: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.
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Re: Unions Shut Down Hostess

Postby Phatscotty on Tue Nov 27, 2012 4:20 am

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$
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Re: Unions Shut Down Hostess

Postby MeDeFe on Tue Nov 27, 2012 4:30 am

Phatscotty wrote:
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, the fuel, 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 chump change....

even when it's 1$

None of what you quoted necessarily leads to the conclusion you drew, namely that the company had to pay twice as much as strictly required. After all, one truck full of Twinkies and one truck full of Wonderbread is no different from two trucks loaded with a mix of the two products. The truck drivers can probably do something else while their trucks are being loaded. Finally, as with the trucks, 2 people handling the Twinkies and 2 people handling the Wonderbread is no different from 4 people handling either product.

I actually agree with you that it's a silly requirement, and I don't think it could be fulfilled perfectly without some additional cost. But I don't for a moment believe that it actually doubled the costs for the company as you say.
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Re: Unions Shut Down Hostess

Postby Phatscotty on Tue Nov 27, 2012 4:40 am

MeDeFe wrote:
Phatscotty wrote:
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, the fuel, 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 chump change....

even when it's 1$

None of what you quoted necessarily leads to the conclusion you drew, namely that the company had to pay twice as much as strictly required. After all, one truck full of Twinkies and one truck full of Wonderbread is no different from two trucks loaded with a mix of the two products. The truck drivers can probably do something else while their trucks are being loaded. Finally, as with the trucks, 2 people handling the Twinkies and 2 people handling the Wonderbread is no different from 4 people handling either product.

I actually agree with you that it's a silly requirement, and I don't think it could be fulfilled perfectly without some additional cost. But I don't for a moment believe that it actually doubled the costs for the company as you say.


I spent many years in a couple of unions, and I understand that language.

Sure, you are right. But it shows the overall picture quite well.
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Re: Unions Shut Down Hostess

Postby Dukasaur on Tue Nov 27, 2012 10:00 am

MeDeFe wrote:
Phatscotty wrote:
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, the fuel, 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 chump change....

even when it's 1$

None of what you quoted necessarily leads to the conclusion you drew, namely that the company had to pay twice as much as strictly required. After all, one truck full of Twinkies and one truck full of Wonderbread is no different from two trucks loaded with a mix of the two products. The truck drivers can probably do something else while their trucks are being loaded. Finally, as with the trucks, 2 people handling the Twinkies and 2 people handling the Wonderbread is no different from 4 people handling either product.

I actually agree with you that it's a silly requirement, and I don't think it could be fulfilled perfectly without some additional cost. But I don't for a moment believe that it actually doubled the costs for the company as you say.

Wouldn't have doubled the costs, of course, but would have added to it substantially. A lot of retail outlets have very small orders, and of course they tend to be in urban areas, so the fuel wasted in traffic and the time required to drive to them is quite high. Overall, the cost of delivery relative to the value of the product is very high.

I know that when Hostess bought Frito-Lay, the savings in distribution costs was the top reason cited as motivating the merger. Why didn't they apply the same reasoning to other product lines?

Still, none of this excuses the management. If union work rules were the largest problem, why didn't they ask the union for work rules concessions instead of wage concessions?

Especially vis-a-vis the delivery situation. If I'm a business owner, and I have two delivery trucks running and I suspect one truck could do both routes, I'll think something like this: Each driver costs me $200/day, but each truck costs me $300/day, for a total of $1000/day. The drivers are going to be pissed off if I fire either one of them. (Obviously the one I fire, but even the other one will show a morale drop.) On the other hand, the trucks don't really care if I keep them or not. So, here's a plan. I'll combine the routes, sell one of the trucks, but keep both drivers. Each one can work half the week and spend the other half on standby at full pay. I'll be trimming my costs from $1000 to $700, which might not be as good as getting all the way to $500 but it's still a big savings. And the $200 is not pure loss; I'm getting an experienced fill-in if the other other calls in sick or quits unexpectedly, or in case business picks up. This kind of compromise is indeed possible and in some companies has been done successfully, but it requires a little bit of creative thinking. Oh, and it also requires thinking about your employees as being rational people instead of stereotyping them as "those union assholes."
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Re: Unions Shut Down Hostess

Postby oVo on Tue Nov 27, 2012 5:05 pm

Unions didn't shut down Hostess,
Corporate greed did.
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Re: Unions Shut Down Hostess

Postby thegreekdog on Tue Nov 27, 2012 5:08 pm

oVo wrote:Unions didn't shut down Hostess,
Corporate greed did.


I'm pretty sure it was corporate incompetence, unions, and a hostess of other factors. Not sure corporate greed was what did it. Plenty of successful companies pay their shareholders nice dividends and their officers high salaries and don't go out of business.
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Re: Unions Shut Down Hostess

Postby oVo on Tue Nov 27, 2012 5:18 pm

thegreekdog wrote:Plenty of successful companies pay their shareholders nice dividends and their officers high salaries and don't go out of business.

True, Wal-Mart is a prime example.
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Re: Unions Shut Down Hostess

Postby thegreekdog on Tue Nov 27, 2012 5:54 pm

oVo wrote:
thegreekdog wrote:Plenty of successful companies pay their shareholders nice dividends and their officers high salaries and don't go out of business.

True, Wal-Mart is a prime example.


Right. You're probably trying to make a point, but I'm not sure what it is.
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Re: Unions Shut Down Hostess

Postby stahrgazer on Fri Nov 30, 2012 7:32 pm

Tom Sullivan did a show on the Twinkies and the Wal-Mart "Black Thursday Walkout" the other night. A woman called in comparing Unionized Macy's 5-20 years ago (she worked there 15 years but left them 5 years ago) to non-Unionized Wal-Mart. As late as 5 years ago, Unionized-Macy's was paying minimum wage (just over $7), no benefits, and and employee had to be there for 18 months to get a (small) raise. While non-unionized Wal-Mart in the same city was paying over $9 an hour.

Not all unions are bad, and not all companies are good.

I heard today, the Hostess management is wanting its bonuses - I think they said it totals over $1billion worth of bonuses - that the guys who mis-managed the company are putting in a claim for with the bankruptcy court.

Hearing that makes me think, nope, Unions didn't shut down Hostess, management greed did.
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Re: Unions Shut Down Hostess

Postby Evil Semp on Fri Nov 30, 2012 10:31 pm

stahrgazer wrote:Tom Sullivan did a show on the Twinkies and the Wal-Mart "Black Thursday Walkout" the other night. A woman called in comparing Unionized Macy's 5-20 years ago (she worked there 15 years but left them 5 years ago) to non-Unionized Wal-Mart. As late as 5 years ago, Unionized-Macy's was paying minimum wage (just over $7), no benefits, and and employee had to be there for 18 months to get a (small) raise. While non-unionized Wal-Mart in the same city was paying over $9 an hour.

Not all unions are bad, and not all companies are good.

I heard today, the Hostess management is wanting its bonuses - I think they said it totals over $1billion worth of bonuses - that the guys who mis-managed the company are putting in a claim for with the bankruptcy court.

Hearing that makes me think, nope, Unions didn't shut down Hostess, management greed did.


The amount was $1.8 million.
http://www.jdjournal.com/2012/11/30/hos ... 8-million/

"Hostess claims that the bonuses for the top executives are needed in order to retain them as the liquidation process plays out for the company."

It's a shame the executives don't have the same frame of mind as scotty. They should be thankful that they have a job for another year but what they heck give them extra money.

Phatscotty wrote:Well, it's not very illogical for me. If my job wanted to cut me 5%, I wouldn't walk out. Maybe I would start looking around or something, but when I worked at a union job, we were taking cuts every year. Cuts in pay, cuts in benefits, giving up raises. the main reason it wasn't a big deal to me was because I was earning a damn good wage,
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Re: Unions Shut Down Hostess

Postby stahrgazer on Sat Dec 01, 2012 3:59 am

Evil Semp wrote:
stahrgazer wrote:Tom Sullivan did a show on the Twinkies and the Wal-Mart "Black Thursday Walkout" the other night. A woman called in comparing Unionized Macy's 5-20 years ago (she worked there 15 years but left them 5 years ago) to non-Unionized Wal-Mart. As late as 5 years ago, Unionized-Macy's was paying minimum wage (just over $7), no benefits, and and employee had to be there for 18 months to get a (small) raise. While non-unionized Wal-Mart in the same city was paying over $9 an hour.

Not all unions are bad, and not all companies are good.

I heard today, the Hostess management is wanting its bonuses - I think they said it totals over $1billion worth of bonuses - that the guys who mis-managed the company are putting in a claim for with the bankruptcy court.

Hearing that makes me think, nope, Unions didn't shut down Hostess, management greed did.


The amount was $1.8 million.
http://www.jdjournal.com/2012/11/30/hos ... 8-million/

"Hostess claims that the bonuses for the top executives are needed in order to retain them as the liquidation process plays out for the company."

It's a shame the executives don't have the same frame of mind as scotty. They should be thankful that they have a job for another year but what they heck give them extra money.

Phatscotty wrote:Well, it's not very illogical for me. If my job wanted to cut me 5%, I wouldn't walk out. Maybe I would start looking around or something, but when I worked at a union job, we were taking cuts every year. Cuts in pay, cuts in benefits, giving up raises. the main reason it wasn't a big deal to me was because I was earning a damn good wage,


Okay, 1.8million, it's still a lot of money for a company that's going under. I think the situation is worse even than, "be thankful to have a job for another year." The mindset of "get in, get mine, and frig everyone else," No company loyalty, no country loyalty - from guys at the top. Precisely why I'm no longer as conservative/pro-capitalism as I once was - seeing how "no morals, no ethics, no loyalty," is praised by far too many pro-capitalists.

With those types of guys in power as an example, can you really, really, blame "unions" or "union workers" for wanting to band together to be powerful to do what they can to "get in, get mine, and frig everyone else." ??? Aren't they just playing "follow the leader" when they do that?

I mean, really, why should the low level worker be more loyal, more willing to sacrifice, than the top dogs there? Is the exec who took a $1 "salary" in for some of that bonus, and if so, doesn't that change the supposed "sacrifice" he made? "No, no, don't worry about my salary, just give me a nice big bonus at the end of the year."

Hey, I'd work for a dollar "salary" if I'd get a million dollars (oh, excuse me, $1.8 million) even if I ran my company under the river, wouldn't you?

Also, if those execs were in for that "bonus" whether the company went under or not, how much did they really work at "bargaining" with the union? How much of that, "What do I care, I get a huge bonus whether we stay open or not," came to the bargaining table?
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