Unions Shut Down Hostess

[Iliad]

btw, this link has been "corrected" At first I was just going to point out that these management pay raises were "claims" from the union, but it doesn't matter anymore anyways...

Yes it does matter. It could explain part of the reason why the employees would accept the pay cuts.

An earlier version of as well as an earlier headline of this post incorrectly stated that Greg Rayburn received a 300 percent raise as CEO of Hostess as the company approached bankruptcy. Rayburn wasn't CEO of Hostess until after the company filed for bankruptcy. The post also incorrectly stated that he was paid a salary of up to $2,550,000 per year. His salary when he joined the company was $100,000 per month, according to a company spokesman.

The name given was wrong but that doesn't change the fact about the pay increases or at least the attempt at the pay increases.

Hostess’ creditors accused the company in April of manipulating executive salaries with the aim of getting around bankruptcy compensation rules, the Wall Street Journal reported at the time. In response, Rayburn announced he would cut his pay and that of other executives to $1 until Dec. 31 or whenever Hostess came out of bankruptcy.

I bet this won't matter though. The incorrect information has been corrected, but the opinions of posters that have been strongly shaped based solely on the size of the pay raises and salaries for the CEO and management will probably stay the same...

Actually it does matter. It show me that he might have taken one for the team but we don't know about his whole pay and compensation package.

Here is an article explaining the CEO changes at Hostess. http://blogs.wsj.com/deals/2012/03/09/h ... as-sought/

ty again for the link. I am eating them up like candy!

However, it does show he certainly did his part, basically taking a 99.9% pay cut on his standard salary. If that isn't good enough, then I'm not sure if anything would have been good enough. He not only took one for the team, he sacrificed so that there was still a "team" at all. He's probably pretty pissed now that after what he gave up to keep the company going and keep the workers working, and they just walked out on the company. I'm more pissed at the employees now too.

Let me read your link

Why are you pissed off at the employees? Why is this an emotional event at all?

Isn't this your fabled free market at work? A company can't operate unless it pays its employees below market rate wages.
Clearly it's inefficient relative to its competitors if it can't maintain a profit and pay its employees the market rate for their wages, so by going bankrupt it's opening up market space for its more efficient competitors. Its employees, as rational self-interested individuals, as all are in an economist framework, have no interest in sacrificing their own wages to perpetuate inefficiency. If a company can't pay its employees the average market rate wages and maintain a profit, then i don't see why it should be in business.

Why is it, when tax hikes are proposed, even by 1 or 2% the lovely business owners can threaten to flee and relocate and this is celebrated as the 'market' in action, but apparently employees are supposed to accept a 5% pay cut just after concessions two years ago. Like their jobs are some kind of gift bestowed on them and their rational self-interest is not at stake.

You make for a shitty economist if you can't even adhere to your own ideology and just blindly shit on the poorer side in an argument.

Still no-one even trying to refute this.

[Phatscotty]

pff. #1, you think this is a free market? That is so friggin laughable, I don't blame anyone for not touching it!

This (Hostess) it what it looks like when the free market has been suffocated.

[Iliad]

pff. #1, you think this is a free market? That is so friggin laughable, I don't blame anyone for not touching it!

This (Hostess) it what it looks like when the free market has been suffocated.

Expecting basic knowledge of economics from you was a bit much I see. Carry on.

[Lootifer]

I understand the drop in demand, debt loading, and rise in costs. The response is to make cuts where you can, even in wages.

I'm really not trying to take the side of the management, I'm trying to take the side of the JOBS.

Fair enough; I would say though, a good portion of those jobs, from an economic/financial pov, needed to go even if Hostess were to survive. Just a sad consequence of a big business struggling.

Whatever it takes to keep them here, for however as long as possible.

Either we want a better economy with more workers and taxpayers and wealth creation, or we don't.

Yes but Hostess could have failed because the free market pushed them out, that means the market is signalling those workers would be better off doing something other than working for Hostess.

You could now think of it as a great opportunity for a other foodstuff or similar start ups or established businesses to move into places where the hostess previously were and get a nice big pool of labour to choose from.

[AndyDufresne]

This (Hostess) it what it looks like when the free market has been suffocated.

Pfft, Listen, I don't claim to know how suffocation works, but something seems off here.


--Andy

[thegreekdog]

pff. #1, you think this is a free market? That is so friggin laughable, I don't blame anyone for not touching it!

This (Hostess) it what it looks like when the free market has been suffocated.

What are you even talking about? There was no government intervention here at all that I could see. What am I missing?

Now, if Hostess got a bailout... then we'd have something to discuss.

[Neoteny]

Twinkies would have been saved by cap and trade.

[Phatscotty]

pff. #1, you think this is a free market? That is so friggin laughable, I don't blame anyone for not touching it!

This (Hostess) it what it looks like when the free market has been suffocated.

Expecting basic knowledge of economics from you was a bit much I see. Carry on.

what a pointless post....

[Phatscotty]

pff. #1, you think this is a free market? That is so friggin laughable, I don't blame anyone for not touching it!

This (Hostess) it what it looks like when the free market has been suffocated.

What are you even talking about? There was no government intervention here at all that I could see. What am I missing?

Now, if Hostess got a bailout... then we'd have something to discuss.

The market place in America is definitely not a free market or barely free market friendly, and highly over-regulated by both the government, and the union, in this case.

[thegreekdog]

pff. #1, you think this is a free market? That is so friggin laughable, I don't blame anyone for not touching it!

This (Hostess) it what it looks like when the free market has been suffocated.

What are you even talking about? There was no government intervention here at all that I could see. What am I missing?

Now, if Hostess got a bailout... then we'd have something to discuss.

The market place in America is definitely not a free market or barely free market friendly, and highly over-regulated by both the government, and the union, in this case.

Wait, what? The union is highly over-regulating the marketplace? Explain how that works.

I agree that the economy of the United States it not a free market, obviously. However, in this instance, with Hostess, I'm looking for where the over-regulation occurred that caused the company to go bankrupt. It seems that this is EXACTLY how the free market should work.

And again, we can see the difference between Phatscotty the supposed free market guy and Phatscotty the mainstream Republican, big business guy.

[jj3044]

pff. #1, you think this is a free market? That is so friggin laughable, I don't blame anyone for not touching it!

This (Hostess) it what it looks like when the free market has been suffocated.

What are you even talking about? There was no government intervention here at all that I could see. What am I missing?

Now, if Hostess got a bailout... then we'd have something to discuss.

The market place in America is definitely not a free market or barely free market friendly, and highly over-regulated by both the government, and the union, in this case.

Wait, what? The union is highly over-regulating the marketplace? Explain how that works.

I agree that the economy of the United States it not a free market, obviously. However, in this instance, with Hostess, I'm looking for where the over-regulation occurred that caused the company to go bankrupt. It seems that this is EXACTLY how the free market should work.

And again, we can see the difference between Phatscotty the supposed free market guy and Phatscotty the mainstream Republican, big business guy.

I think what he means (PS correct me if I am wrong), is that union regulations that the company has to abide by were a reason (not THE reason, but A reason) that the company failed. i.e. the fact that Wonderbread and Twinkies couldn't be shipped on the same truck.

In my experience, unions typically bog down companies and make them less efficient.

Also, to those who want to blame the union members, you should probably instead blame the union leadership, not the rank-and-file members. When votes come around in unions, the leaders basically tell the membership how they should be voting, and also control the level of information that gets out to those members. What do you think happens a majority of the time? The members vote as they are instructed to. Although I wasn't there, I bet the union leaders were telling their members not to accept the last proposal, and that the "company closing" was a bunch of BS just to get them to sign on the dotted line...

[thegreekdog]

pff. #1, you think this is a free market? That is so friggin laughable, I don't blame anyone for not touching it!

This (Hostess) it what it looks like when the free market has been suffocated.

What are you even talking about? There was no government intervention here at all that I could see. What am I missing?

Now, if Hostess got a bailout... then we'd have something to discuss.

The market place in America is definitely not a free market or barely free market friendly, and highly over-regulated by both the government, and the union, in this case.

Wait, what? The union is highly over-regulating the marketplace? Explain how that works.

I agree that the economy of the United States it not a free market, obviously. However, in this instance, with Hostess, I'm looking for where the over-regulation occurred that caused the company to go bankrupt. It seems that this is EXACTLY how the free market should work.

And again, we can see the difference between Phatscotty the supposed free market guy and Phatscotty the mainstream Republican, big business guy.

I think what he means (PS correct me if I am wrong), is that union regulations that the company has to abide by were a reason (not THE reason, but A reason) that the company failed. i.e. the fact that Wonderbread and Twinkies couldn't be shipped on the same truck.

In my experience, unions typically bog down companies and make them less efficient.

Also, to those who want to blame the union members, you should probably instead blame the union leadership, not the rank-and-file members. When votes come around in unions, the leaders basically tell the membership how they should be voting, and also control the level of information that gets out to those members. What do you think happens a majority of the time? The members vote as they are instructed to. Although I wasn't there, I bet the union leaders were telling their members not to accept the last proposal, and that the "company closing" was a bunch of BS just to get them to sign on the dotted line...

I don't disagree with anything you've typed, except that the union does not impose regulations.

Companies have no choice when it comes to actual state or federal regulations. They must abide by those rules.

In the context of unions, if a union negotiates a contract whereby twinkies and wonderbread couldn't be on the same truck, there is a negotiation. Negotiation. The company said okay to that at some point. The company is not forced into the decision.

The word "regulation" and "union" should not be used in the same sentence from my perspective. They are mutually exclusive.

[Funkyterrance]

I understand the drop in demand, debt loading, and rise in costs. The response is to make cuts where you can, even in wages.

I'm really not trying to take the side of the management, I'm trying to take the side of the JOBS.

Fair enough; I would say though, a good portion of those jobs, from an economic/financial pov, needed to go even if Hostess were to survive. Just a sad consequence of a big business struggling.

Whatever it takes to keep them here, for however as long as possible.

Either we want a better economy with more workers and taxpayers and wealth creation, or we don't.

Yes but Hostess could have failed because the free market pushed them out, that means the market is signalling those workers would be better off doing something other than working for Hostess.

You could now think of it as a great opportunity for a other foodstuff or similar start ups or established businesses to move into places where the hostess previously were and get a nice big pool of labour to choose from.

I think that ultimately yes, those workers will be more effective at another job but the problem is what happens in the meantime? Some people are so locked in to their current income situations they can't afford to go very long without work. I think this may be the point that PS is trying to make.
The fact is there is enough money to go around but nobody wants to accept the fact that your fortune, if you have any, is a product of the system and to refuse to give back to the system that put you where you are is short-sighted and small-minded. Bailouts obviously are not the answer but there ought to be some sort of program that specifically relocates workers such as these into another job of relatively equal prosperity. This program should be payed for by the taxpayers. To me the whole "What's mine is mine and what's yours is yours" mentality towards jobs/income is laughable. The rich get rich on the sweat of the working man.

[oVo]

Hostess didn't need a bailout. The reality here is this greedy group
of executives took their sweet golden parachute and bailed out.

[jj3044]

pff. #1, you think this is a free market? That is so friggin laughable, I don't blame anyone for not touching it!

This (Hostess) it what it looks like when the free market has been suffocated.

What are you even talking about? There was no government intervention here at all that I could see. What am I missing?

Now, if Hostess got a bailout... then we'd have something to discuss.

The market place in America is definitely not a free market or barely free market friendly, and highly over-regulated by both the government, and the union, in this case.

Wait, what? The union is highly over-regulating the marketplace? Explain how that works.

I agree that the economy of the United States it not a free market, obviously. However, in this instance, with Hostess, I'm looking for where the over-regulation occurred that caused the company to go bankrupt. It seems that this is EXACTLY how the free market should work.

And again, we can see the difference between Phatscotty the supposed free market guy and Phatscotty the mainstream Republican, big business guy.

I think what he means (PS correct me if I am wrong), is that union regulations that the company has to abide by were a reason (not THE reason, but A reason) that the company failed. i.e. the fact that Wonderbread and Twinkies couldn't be shipped on the same truck.

In my experience, unions typically bog down companies and make them less efficient.

Also, to those who want to blame the union members, you should probably instead blame the union leadership, not the rank-and-file members. When votes come around in unions, the leaders basically tell the membership how they should be voting, and also control the level of information that gets out to those members. What do you think happens a majority of the time? The members vote as they are instructed to. Although I wasn't there, I bet the union leaders were telling their members not to accept the last proposal, and that the "company closing" was a bunch of BS just to get them to sign on the dotted line...

I don't disagree with anything you've typed, except that the union does not impose regulations.

Companies have no choice when it comes to actual state or federal regulations. They must abide by those rules.

In the context of unions, if a union negotiates a contract whereby twinkies and wonderbread couldn't be on the same truck, there is a negotiation. Negotiation. The company said okay to that at some point. The company is not forced into the decision.

The word "regulation" and "union" should not be used in the same sentence from my perspective. They are mutually exclusive.

You are correct, "regulation" is a poor term for it, I was just trying to clarify what PS was talking about.

[HapSmo19]

Bailouts obviously are not the answer but there ought to be some sort of program that specifically relocates workers such as these into another job of relatively equal prosperity. This program should be payed for by the taxpayers.

Suck balls(if you're not already).
Their union can pay for it.

[Funkyterrance]

Bailouts obviously are not the answer but there ought to be some sort of program that specifically relocates workers such as these into another job of relatively equal prosperity. This program should be payed for by the taxpayers.

Suck balls(if you're not already).
Their union can pay for it.

Your problem with this is what exactly? Not that I am expecting an especially substantive response, considering your above quote.
Frankly the unions are not to be trusted with this responsibility as they aren't exactly the model of efficiency.

[patches70]

Frankly the unions are not to be trusted with this responsibility as they aren't exactly the model of efficiency.

If "with this responsibility" you mean finding a person a job,
why shouldn't it just be the individual's responsibility to find themselves a job?

[Funkyterrance]

Frankly the unions are not to be trusted with this responsibility as they aren't exactly the model of efficiency.

If "with this responsibility" you mean finding a person a job,
why shouldn't it just be the individual's responsibility to find themselves a job?

I mentioned this earlier but the time frame between when someone loses their job and when they get another comparable one can make a world of difference. Someone out of work is not helping themselves nor the economy. Why not have a system in place to make this transition as efficient as possible?

[patches70]

Frankly the unions are not to be trusted with this responsibility as they aren't exactly the model of efficiency.

If "with this responsibility" you mean finding a person a job,
why shouldn't it just be the individual's responsibility to find themselves a job?

I mentioned this earlier but the time frame between when someone loses their job and when they get another comparable one can make a world of difference. Someone out of work is not helping themselves nor the economy. Why not have a system in place to make this transition as efficient as possible?

<sigh>, the problem is, take Hostess for example, 18,000 workers just got laid off. That's 18,000 with the same skill sets competing for a finite number of jobs.

What happens when you get a massive burst of a product in a static market?

The cost of the product decreases.
In the case of these workers, the ones who get the same jobs in their respective fields are the ones who will be willing to take less money.
That's why it's up to the individual to get some skills beyond their current ones. There are plenty of programs already in place for this, but it's up to the individual to actually go out and learn new things.
Not to mention, they all lost their jobs and it's apparent that there are too many workers for that particular field for what the economic realities are as to the demand for the products that are being produced. There can only be but so many bakers and drivers and such.

The existing companies will expand, eventually (hopefully), but that's not immediate. Capital has to be raised, and all sorts of other administrative stuff needs to happen first.

You can't just wave a magic wand and everybody has a freaking job, man. Until then, there is unemployment insurance and job training programs available already. Everything you said you want already exists in some degree already.

Hey, I got an idea, just make a law that says everyone must be employed. Problem solved! LOL




Oh, and that- "someone out of a job isn't helping the economy", it'd be best if you didn't tell that to Nancy "Botox" Pelosi and Joe "Plugs" Biden, both of which have said, in public with their bald faced liar mouths showing, unemployment payments are a boom to the economy.
So, get it right!

[Funkyterrance]

<sigh>, the problem is, take Hostess for example, 18,000 workers just got laid off. That's 18,000 with the same skill sets competing for a finite number of jobs.

What happens when you get a massive burst of a product in a static market?

The cost of the product decreases.
In the case of these workers, the ones who get the same jobs in their respective fields are the ones who will be willing to take less money.
That's why it's up to the individual to get some skills beyond their current ones. There are plenty of programs already in place for this, but it's up to the individual to actually go out and learn new things.
Not to mention, they all lost their jobs and it's apparent that there are too many workers for that particular field for what the economic realities are as to the demand for the products that are being produced. There can only be but so many bakers and drivers and such.

The existing companies will expand, eventually (hopefully), but that's not immediate. Capital has to be raised, and all sorts of other administrative stuff needs to happen first.

You can't just wave a magic wand and everybody has a freaking job, man. Until then, there is unemployment insurance and job training programs available already. Everything you said you want already exists in some degree already.

Hey, I got an idea, just make a law that says everyone must be employed. Problem solved! LOL




Oh, and that- "someone out of a job isn't helping the economy", it'd be best if you didn't tell that to Nancy "Botox" Pelosi and Joe "Plugs" Biden, both of which have said, in public with their bald faced liar mouths showing, unemployment payments are a boom to the economy.
So, get it right!

Lolz.
Well I can respect your position in that the economy may be unable to support the out of work people but aren't all the "systems" in place which you mention to act as a safety net to those people out of work payed for by the taxpayers? Even if jobs were "created" for the sake of these out of work people, wouldn't this be a better alternative to unemployment? Have them make license plates or break rocks if that's what it takes. At least they would be participating in some level of productivity. My point is get people back out working; they are worth more doing something, anything, than they are collecting a check.

[patches70]

Even if jobs were "created" for the sake of these out of work people, wouldn't this be a better alternative to unemployment?

No, it's not. While unemployed the unemployed can be taking steps to learn new skills to find new jobs in other fields and looking for jobs on their own.

So if...

Have them make license plates or break rocks if that's what it takes. At least they would be participating in some level of productivity. My point is get people back out working; they are worth more doing something, anything, than they are collecting a check.

while they are breaking rocks, digging holes or whatever else stupid, worthless job paid for by taxpayers, when will they get the job training they need?

Not to mention, by creating such "government companies" to do whatever that doesn't need to be done, you must create another new layer of government agency, which increases costs with no benefit. The government, to pay for this proposal, must take from some people to give to other people, through taxes. It's horribly inefficient and wasteful. It's not government's role to get someone a job. So you are just taking from one sector to give to another sector and since the government borrows 46 cents of every dollar it spends as it stand now, you get a negative drag when you are trying to help the economy. You aren't helping the economy that way, you are harming it.



Naw, dude, there are plenty of programs available as it is now. Don't fall for all the emotional stuff. Take it as a lesson, actually. Shit happens. One is wise to have emergency funds, generally six months wages saved up just for such things as losing your job suddenly. Living within your means and having marketable skills. Poor bastards who get content and don't use prudence in their lives, well, that's on them. Freedom means freedom to starve. One of the cons I suppose, but there it is.

Those workers will be fine in the long run, if the economy truly is "recovering". I have my doubts about that, but it is what it is. If what is being spouted by Washington about the economy is true, then these workers will find jobs if that's what they wish. Didn't you see the latest unemployment numbers? Apparently, jobs are coming back big time.
(There is much more to that story but I'd rather not get into that.)

[Funkyterrance]

Even if jobs were "created" for the sake of these out of work people, wouldn't this be a better alternative to unemployment?

No, it's not. While unemployed the unemployed can be taking steps to learn new skills to find new jobs in other fields and looking for jobs on their own.

I've got to stop for a second on this point. How does one acquire new skills on an income that is based on former employment? This just appears a further drain on the system.

Have them make license plates or break rocks if that's what it takes. At least they would be participating in some level of productivity. My point is get people back out working; they are worth more doing something, anything, than they are collecting a check.

while they are breaking rocks, digging holes or whatever else stupid, worthless job paid for by taxpayers, when will they get the job training they need?

Not to mention, by creating such "government companies" to do whatever that doesn't need to be done, you must create another new layer of government agency, which increases costs with no benefit. The government, to pay for this proposal, must take from some people to give to other people, through taxes. It's horribly inefficient and wasteful. It's not government's role to get someone a job. So you are just taking from one sector to give to another sector and since the government borrows 46 cents of every dollar it spends as it stand now, you get a negative drag when you are trying to help the economy. You aren't helping the economy that way, you are harming it.

Here's my angle:
Once unemployed a person is assigned some mind numbing, uninteresting job. What better initiative to improve oneself to fill a niche in the private sector? With a check coming in the mail its way too easy to procrastinate and loaf around. In a perfect world people would pull themselves up by the bootstraps and shape up to fit the needs of the work force but honestly I've seen the opposite in my personal experiences. I worked for a temp agency for a time and was working alongside some people who had been assigned the same job by some organization (government). Upon making acquaintance with these people they confided in me that they planned on going back onto unemployment instead of sticking with the somewhat boring job we were doing. They explained to me that they would be making more money this way, at least in the short term and they hated the work anyway. Once their unemployment ran out they would just be placed in another cushy yet unsatisfying position. Now I am not sure of the actual nuts and bolts of these people's situations but I got a pretty good glimpse of their "humanity" as it were. The job we were performing, while tedious, was needed. I know this for a fact because they were hiring temps like mad. Basically I feel that there is more incentive for people who get laid off to get back in the mix if they were obligated to do something instead of nothing in order to get paid. Lets say that someone actually prefers the mind numbing/back breaking work assigned. This is great as they can be promoted to the highway department or some other as they are obviously more qualified than the current employees.

[Timminz]

<sigh>, the problem is, take Hostess for example, 18,000 workers just got laid off. That's 18,000 with the same skill sets competing for a finite number of jobs.

Companies (Hostess) don't require a variety of skill sets? Every single employee of any company (Hostess) has the exact same skill set?

That is an interesting premise you've picked for your argument.

[HapSmo19]

Bailouts obviously are not the answer but there ought to be some sort of program that specifically relocates workers such as these into another job of relatively equal prosperity. This program should be payed for by the taxpayers.

Suck balls(if you're not already).
Their union can pay for it.

Your problem with this is what exactly? Not that I am expecting an especially substantive response, considering your above quote.
Frankly the unions are not to be trusted with this responsibility as they aren't exactly the model of efficiency.

Create a government agency to relocate these workers that effectively quit their jobs into jobs of relatively equal prosperity? Like a job that pays 5 percent less, for instance? How sweet. Is that good enough for them now?
And the government is the model of efficiency? Talk about LOLZ's.