Hostess and the bakers union

Watching jobs fritter away

By on November 21, 2012 11:25:37 AM from JoeUser Forums JoeUser Forums

terpfan1980

Join Date 08/2004
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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.

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November 21, 2012 11:31:55 AM from JoeUser Forums JoeUser Forums

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.

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November 21, 2012 11:53:17 AM from WinCustomize Forums WinCustomize Forums

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.

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November 21, 2012 12:01:32 PM from WinCustomize Forums WinCustomize Forums

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.

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November 21, 2012 12:15:05 PM from JoeUser Forums JoeUser Forums

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.

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November 21, 2012 12:28:09 PM from WinCustomize Forums WinCustomize Forums

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

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November 21, 2012 12:59:13 PM from Elemental Forums Elemental Forums

Quoting 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.

 

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November 21, 2012 1:06:26 PM from Elemental Forums Elemental Forums

Quoting 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. 

 

Quoting 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. 

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November 21, 2012 1:09:34 PM from WinCustomize Forums WinCustomize Forums

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

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November 21, 2012 1:49:40 PM from WinCustomize Forums WinCustomize Forums

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.

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November 21, 2012 2:28:57 PM from WinCustomize Forums WinCustomize Forums

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

"Hey, where's the cream filling?"  

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November 21, 2012 2:37:35 PM from Elemental Forums Elemental Forums

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.

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November 21, 2012 2:50:00 PM from Elemental Forums Elemental Forums

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.

 

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November 21, 2012 3:06:07 PM from WinCustomize Forums WinCustomize Forums

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.

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November 21, 2012 3:13:46 PM from JoeUser Forums JoeUser Forums

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

Yes.

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November 21, 2012 3:16:19 PM from Elemental Forums Elemental Forums

Quoting 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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November 21, 2012 3:24:23 PM from JoeUser Forums JoeUser Forums

Quoting Alstein,
just like what Bain Capital does.

Spare us.  Far more Bain companies were turned around & made profitable than went under.  Companies like Bain serve a very useful function in the economy.  It's very shortsighted to think otherwise.

Quoting Alstein,
I'm not opposed to capitalism of the sort Brad practices

So it's just a matter of scale?  Or dependent on whether it's practiced by a nice guy or something?

I watched most of a tribute 2-hour documentary on David Geffen last night, a vulture capitalist of supreme skill, with glowing hosannas from a ton of the lib-rockers who publicly & routinely denigrate capitalism (while making fortunes from it).  To say that the irony was lost on them would be a major understatement.

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November 21, 2012 10:02:25 PM from JoeUser Forums JoeUser Forums

Quoting 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.

It is actually smaller regional bakeries as well as larger ones like Grupo Bimbo that put them out of business. They owned a lot of older bakeries. They kept buying up old bakeries instead of investing in newer equipment for the outdated ones they owned. A lot of processed food companies went under or were bought out prior to declaring bankruptcy during this last recession. Much of it went unnoticed because they were bought out quickly. This one stands out because the powers that be decided to turn it into a political sideshow. The regional bakery in my area that they were competing against is already adding another shift and hiring a ton of people because they will end up getting the grocery chain brands that hostess was baking in this area.  I suspect that is the case in most areas since a large part of their business involved contracts to bake brands they don't own.

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November 21, 2012 10:33:04 PM from JoeUser Forums JoeUser Forums

Quoting Daiwa,
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.

About the only jobs that will be offshored in this case is upper management if the brands are bought by a foreign company. Imported food is not cheap. Food is a very low margin product whose price is very much effected by transportation costs. 

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November 21, 2012 11:04:31 PM from JoeUser Forums JoeUser Forums

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

You are incorrect however. They held onto everything while they defaulted on pension contributions then tried to get the unions to forgive that debt and take a stake in the company whose debt and liabilities are more than twice the value of its assets. They still own all the Hostess brands as well all the other signature brands they bought over the years including Drake's Cakes, Dolly Madison, Wonder, Natures Pride, Merida, etc.  The hedge fund bought the debt (at a huge discount)during the last Bancruptcy so their debt has top priority. So they will make a handsome profit when the brands are sold and all the other creditors will most likely get screwed.

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November 21, 2012 11:30:40 PM from JoeUser Forums JoeUser Forums

Quoting WhiteElk,
Then there is the sugar cartel. These are the real bad guys here. Research them. Rather than fight the sugar lobbyists,.

You're kidding, right?

Sugar has been a protected trade since 1785. And now that it's part of the farm bill, sugar tariffs ain't going anywhere anytime soon!

It starts with a senator in a sugar state like for example Marco Rubio, who then shakes hands with a Senator in a corn state, like say Chuck Grassley,  who shakes hands with a Senator from a wheat state, like say Jerry Moran, who then shakes hands with a Senator who got a campaign contribution from the "Friends of Frozen Pizza". So when highly processed frozen pizza is suddenly classified as a vegetable companies like Hostess suddenly have no reason to fight the sugar lobby.

 

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November 22, 2012 12:56:34 AM from JoeUser Forums JoeUser Forums

Quoting Alstein,

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.

 

vulture capitalism is simply part of capitalism.  Out with the old in with the new. That's how it works. Hostess failed because other companies invested in making their companies more efficient and Hostess didn't. It's that simple. Capitalism is destructive in nature. Efficient companies run inefficient companies out of business.  Hostess' competitor in my area is already hiring because they are adding a shift to pick up Hostess' store brand contracts. They are a union shop as well so some of the bakers who striked are already getting jobs that pay more then Hostess was paying. It is what it is. The hedge fund will take their profit and hopefully invest in something new that is efficient and productive.

What boggles me is the disdain some people have for laborers and unions.  I've managed both union and non-union crews for almost 30 years and I'd have to say the union workers have been healthier, happier, and more productive in almost every case.

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November 23, 2012 8:20:55 PM from JoeUser Forums JoeUser Forums

 

 

 

 

For a chuckle, check out this utube parady...the day the Twinkie died!

 

 

 

http://youtu.be/MnsaMtDPX6c

 

 

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November 24, 2012 12:29:23 PM from JoeUser Forums JoeUser Forums

Quoting Smoothseas,
I've managed both union and non-union crews for almost 30 years and I'd have to say the union workers have been healthier, happier, and more productive in almost every case.

I suspect, but don't know, that it depends on the industry, and the degree of affiliation with and control by larger, national unions.

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November 25, 2012 1:22:20 AM from JoeUser Forums JoeUser Forums

Quoting Daiwa,


I suspect, but don't know, that it depends on the industry, and the degree of affiliation with and control by larger, national unions.

It depends mostly on the companies themselves. some of the better non-union companies offered better compensation packages in order to keep the unions out.  From there it depends on management.  I've seen way too many personality conflicts where exceptional workers were lost because  of what I would call managers who don't know how to deal with people.

 Most of the non-union companies I've dealt with offered less as far as healthcare plans, and the unions which have larger pools can offer better coverage for less in light of this. I worked for one company that broke from a union back in the 80's and then went back to using unions within 5 years because the unions where able to provide less expensive healthcare benefits and training because of the larger pool size. They were also able to provide new and temporary employees at a lower cost than what too was costing them to "hire off the street".

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November 25, 2012 11:27:49 AM from JoeUser Forums JoeUser Forums

Quoting Smoothseas,
I worked for one company that broke from a union back in the 80's and then went back to using unions within 5 years because the unions where able to provide less expensive healthcare benefits and training because of the larger pool size. They were also able to provide new and temporary employees at a lower cost than what too was costing them to "hire off the street".

That's the beauty of the market.  Where unions 'work', they should.

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